The owners and members of a bankrupt Henrico golf and country club went into mediation Tuesday in an attempt to resolve the six-month dispute over the club’s future.
The fight over the Dominion Club began in January, when the club filed for Chapter 11 bankruptcy protection after it was faced with a $1.7 million tab of initiation deposit refunds due to about 100 members. Another $10 million in such deposits is due down the road.
Then in April, the creditors committee, made up of Dominion Club members, filed a suit in federal bankruptcy court seeking $11.6 million from the various owner-entities, all tied to local developer HHHunt.
But those entities maintain that refunding those millions are not their obligation and that the task falls the club itself, which is a separate legal entity. They asked in late April that the suit be thrown out.
Dominion Club LC and its landlord Loch Levan Land, both of which are tied to HHHunt, filed the motion to seek mediation a few weeks back. The creditors committee agreed.
So this week a federal judge is sitting down with the parties and trying to work out the issues.
The mediation judge is Frank Santoro, a Hampton Roads-based federal judge famous for presiding over Michael Vick’s high profile bankruptcy. The mediation will take place at the downtown offices of LeClairRyan.
At issue are the terms of the lease that the club pays to Loch Levan. The members of the creditors committee argue that the monthly rent is too high and is part of why the club has never been profitable.
Hunt would like to retain ownership of the club, as it is a centerpiece and key marketing tool of the company’s real estate developments in the giant Wyndham community.
Options that have been discussed include having the club become member-managed or even potentially member-owned.
The details of the mediation meeting will be confidential. If an agreement is reached during the process, the details would be presented to the bankruptcy court for approval.
If a resolution cannot be reached through mediation, a two-day trial is set for Dec. 1 and Dec. 2 at the U.S. Courthouse downtown.
The owners and members of a bankrupt Henrico golf and country club went into mediation Tuesday in an attempt to resolve the six-month dispute over the club’s future.
The fight over the Dominion Club began in January, when the club filed for Chapter 11 bankruptcy protection after it was faced with a $1.7 million tab of initiation deposit refunds due to about 100 members. Another $10 million in such deposits is due down the road.
Then in April, the creditors committee, made up of Dominion Club members, filed a suit in federal bankruptcy court seeking $11.6 million from the various owner-entities, all tied to local developer HHHunt.
But those entities maintain that refunding those millions are not their obligation and that the task falls the club itself, which is a separate legal entity. They asked in late April that the suit be thrown out.
Dominion Club LC and its landlord Loch Levan Land, both of which are tied to HHHunt, filed the motion to seek mediation a few weeks back. The creditors committee agreed.
So this week a federal judge is sitting down with the parties and trying to work out the issues.
The mediation judge is Frank Santoro, a Hampton Roads-based federal judge famous for presiding over Michael Vick’s high profile bankruptcy. The mediation will take place at the downtown offices of LeClairRyan.
At issue are the terms of the lease that the club pays to Loch Levan. The members of the creditors committee argue that the monthly rent is too high and is part of why the club has never been profitable.
Hunt would like to retain ownership of the club, as it is a centerpiece and key marketing tool of the company’s real estate developments in the giant Wyndham community.
Options that have been discussed include having the club become member-managed or even potentially member-owned.
The details of the mediation meeting will be confidential. If an agreement is reached during the process, the details would be presented to the bankruptcy court for approval.
If a resolution cannot be reached through mediation, a two-day trial is set for Dec. 1 and Dec. 2 at the U.S. Courthouse downtown.
On the face of it, this should be a no-brainer for the mediator: In a bankruptcy, the courts would typically auction off the club to the highest bidder or the group best able to run the business effectively (potentially Dominion Club members). Hunt wants to retain control of the club after avoiding its obligations to pay back the deposits. Having declared bankruptcy, by definition the Hunt entity does not have the funds to (re)purchase the club; and by abrogating their contractual responsibilities by not being able to pay back the members deposits, they have shown they can’t run squat (or… Read more »