The plaintiffs claim breach of contract and ask that damages be based on the sale of the Jefferson County property.
According to the Denver Business Journal, a group in metro Denver has sued Green Gables Country Club, Denver, Colo., claiming the club’s board cut them out of sharing in the proceeds from the planned sale of club.
The plaintiffs claim breach of contract and ask that damages be based on the sale of the Jefferson County property in June.
The sale price was not disclosed at the time, although sources close to the deal said the buyers paid about $15 million, reports the Denver Business Journal. Damage amounts would be determined at trial, according to the lawsuit, which was filed in Denver District Court earlier in September.
The club had been experiencing declining membership and financial difficulties since 2008. The Green Gables board met with club members on July 29, 2010, to discuss the financial status of the club and available options, including the sale of the property.
The lawsuit claims the board then advised club members on Oct. 10 that the property would not be sold. Many of the plaintiffs resigned their memberships at that time, because it appeared Green Gables didn’t have a viable plan for continuing operations or selling its assets, according to the suit.
All but two of the plaintiffs were fully vested proprietary members of the club when they resigned their memberships last fall.
The club’s bylaws state that if the club is liquidated, the net proceeds and assets are to be divided among and paid to proprietary members.
The club sent a letter to members in December, saying the club had received an offer from an unaffiliated land developer to purchase the property for $15 million, which would return, on average, $45,000 to $60,000 to full-equity proprietary members.
Plaintiffs were invited in January to reinstate their membership, which, according to the club’s bylaws, would entitle them to a share of the net proceeds from the club’s sale.
Without prior notice, the board moved the date of the meeting at which it was to vote on the plaintiffs’ applications for reinstatement from Feb. 24 to March 22, according to the lawsuit.
Green Gables advised the plaintiffs that they must complete their applications and pay all fees and dues owed by March 2 and that their applications would be considered on March 22.
The suit claims that the plaintiffs met all deadlines and satisfied all the conditions imposed by the board.
At the March 22 meeting, the board adopted a plan to sell the club’s assets, but deferred consideration of the plaintiffs’ applications for reinstatement.
A March 24 letter from Green Gables to members then asserted that “only those members identified in the plan as of March 22, 2011, who are now and remain in good standing are eligible to receive distribution of the liquidation proceeds,” the lawsuit said.
Green Gables will remain open for the rest of the season, then close for business Oct. 31.
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