After the former owner of the North Augusta, S.C., club was ordered to pay a settlement and restitution for fraud, negligent misrepresentation and equitable relief in 2013, the now-public club is seeing an uptick in rounds under KemperSports.
Mount Vintage Plantation’s original 18-hole golf course opened for play in North Augusta, S.C., in 2000, earning rave reviews. A residential development lured plenty of retirees, and a third nine-hole layout was added in 2008, giving the community 27 holes of championship golf. Two years later, however, the course was on the verge of closure, the Augusta (Ga.) Chronicle reported.
The economic downturn had threatened to permanently close Mount Vintage and its surrounding amenities, and that led to infighting among owners and developers. Mike Hooker, a former Whirlpool Co. executive who had moved to Mount Vintage in 2003, became the new mortgagee when he bought the deeds from Mount Vintage Development Co. LLC in August 2010, and nearly a year later he became the official owner when he received the deeds from F&M Bank. Hooker and his wife, Barbara, formed Plantation Alliance LLC to run the course, the Chronicle reported.
A year after taking over ownership, Hooker asked members to financially support the struggling golf club through a specialized plan called Foundation Memberships to raise money for repairing bunkers and fixing the golf car paths and aging stonework on bridges and walls.
It worked, raising hundreds of thousands of dollars from nearly 40 investors, most of whom put up $20,000 each. The goal was $800,000, the Chronicle reported.
However, according to bank records and documents, only a small portion the money raised, $87,000, went into course improvements, the Chronicle reported.
Led by Mount Vintage residents Gregg Karlberg and Ken Wingeier, a group of 26 investors sued Hooker in April 2013 for fraud, negligent misrepresentation and equitable relief after they discovered Hooker used much of the money to pay off other loans, credit card bills and personal expenses, the Chronicle reported.
In March, Circuit Court Judge Franklin Addy ruled in favor of the plaintiffs in their claim of negligent misrepresentation but not on the claims of fraud and equitable relief. The judge found that all elements of negligent misrepresentation were met, and wrote that Hooker knew that the amount of money he sought wouldn’t be enough to deliver on his promises, the Chronicle reported.
Hooker was ordered to pay the group $341,201 to settle the lawsuit. Hooker did not appeal, and he hasn’t made any restitution to the plaintiffs. “There isn’t any money to give them,” Hooker said in late June. “I used it for operating costs. It wasn’t enough to keep it open.”
During an 18-month period from November 2011 to April 2013, according to bank records and documents introduced in court, Hooker deposited more than $770,000 in the Foundation Membership account. Some of the money was used for operating expenses. But thousands of dollars were transferred to Hooker’s personal accounts, the Chronicle reported.
“Some of our money was spent on capital improvements,” Karlberg said. “Some was spent, a good chunk, on operating expenses. But there were things that were not allowed.”
Karlberg said he worked in late 2011 to set up an operating budget for the course so that revenues would cover expenses. Chemicals, fertilizers and other necessities to improve the club were allowed to come out of the Foundation Membership account. What wasn’t allowed, according to the plaintiffs, was money for Mount Vintage’s town center (a facility with an athletic club, swimming pool and tennis courts), debt service and Hooker’s personal expenses, the Chronicle reported.
While work did begin on the bunkers of the newest nine holes in early 2012, Hooker spent a chunk of money on personal items. In 2012, documents show he used money transferred into a personal account to pay for nearly $10,000 in credit card and store charges, more than $3,000 for a personal trainer and hair and nail treatments for his wife, and nearly $2,000 in charitable contributions, the Chronicle reported.
While the money continued to roll in, Foundation Members said they had no idea how the money was being spent. “Money would go in today and go out tomorrow,” said Wes Brinkman, one of the Foundation Members. “It would pass right through.”
By his own admission, Hooker said he had collected $602,000 from Foundation Memberships. Of that money, he estimated that $411,613 went to the golf club and $102,900 to the town center for operating and non-operating expenses to keep them open. The remaining $87,487 went to the first phase of the bunker renovation program, the Chronicle reported.
Plaintiffs attorney Ted Huge, in his letter to the judge, said Hooker’s intent was to use “all monies he received from any source for any use he wanted, including personal uses.”
Hooker disputes that he used the money for personal expenses. “I didn’t misuse the money,” he said. It was used for operating expenses or he was simply repaying himself, Hooker said.
Those who signed up as Foundation Members don’t dispute that they received some value for their investment. Of the group that sued Hooker, their attorneys estimated that each received a little bit more than $6,000 in benefits over a two-year period through reduced dues, golf car plans, guest passes and locker/club storage, the Chronicle reported.
By June 2012, bank records show Hooker had collected $680,000 from the memberships. In a memo to Mount Vintage’s homeowners association members, Hooker wrote that “our original business plan is on or ahead of schedule for the golf course.”
But by November 2012, Hooker wrote in a memo that the club faced an $857,000 shortfall and needed an infusion of cash to pay real estate taxes and two lines of credit. He told property owners there would be a $1,500 assessment to each, the Chronicle reported.
“Further improvements will only happen if funds are available,” Hooker wrote to Foundation Members.
In early 2013, Karlberg and Wingeier met with Hooker in an effort to settle the dispute. Hooker responded in a memo to them January 29, 2013, writing that “currently there are no monies available to be placed in a separate account to be spent on capital projects designated by foundation members.”
The club was forced to close for two months in 2014 after filing for Chapter 11 bankruptcy, and the Bank of Camden in Knoxville, Tenn., stepped in. Hooker now says his biggest regret is getting involved in the first place. His error, he said, was in trying to keep the course open and protect property values, the Chronicle reported.
“The judge recognized that,” Hooker said. “He admonished me for keeping the damn place open.”
Karlberg and the others weren’t happy with how the Foundation Member plan turned out. “We wanted an improved golf course,” Karlberg said. “Unfortunately, we didn’t get it.”
After years of turmoil, Mount Vintage Plantation’s golf course is beginning to make a comeback. More rounds are being played, six of the course’s 107 bunkers have been capped with new sand and liners are being stapled down, the Chronicle reported.
“We’re starting to get bunkers fixed that need to be fixed,” said Ryan Mulvey, the director of golf.
KemperSports was hired in February by the bank that owns the course to manage the facility and its amenities, the Chronicle reported.
“We’re seeing an uptick in public play and people interested in holding events,” Mulvey said.
Just recently, the grill next to the clubhouse reopened after being closed for 14 months. The town center and its amenities remain closed. The course, however, is open for public play, the Chronicle reported.
“People think we are private or we are expensive, but once we get them out here it’s easy to retain,” Mulvey said.