In April, four residents in the Mashpee, Mass., neighborhood filed a motion to stop changes being made to membership packages, which they said would increase costs and reduce access to facilities. The two sides have agreed to end the lawsuit on the grounds that all pre-bankruptcy members can keep their existing membership category or choose a new category without paying an additional fee.
Members and management of New Seabury Country Club in Mashpee, Mass., have reached an agreement to end some of the legal wrangling over proposed changes to the club’s membership structures, the Hyannis, Mass., Cape Cod Times reported.
In April, four residents in the New Seabury neighborhood filed a motion to reopen a 1997 bankruptcy case in an attempt to stop changes being made to membership packages, which residents say would would increase their costs and reduce access to the facilities. The resolution of the bankruptcy case that led to New Seabury Properties assuming ownership in 1998 imposed limits on changes to membership categories, the Times reported.
According to documents filed August 8 in U.S. Bankruptcy Court, the two sides have agreed to end the federal lawsuit on the grounds that all pre-bankruptcy members of New Seabury can either keep their existing membership category or can choose a new membership category without paying an additional initiation fee. In most cases, the club cannot charge more in dues to a pre-bankruptcy member compared to a post-bankruptcy member in the same membership category. In exchange, the club can create new or additional membership categories in the future and adjust annual club dues as it sees fit, the Times reported.
A limitation on the number of golf club memberships contained in the original bankruptcy case’s confirmation order remains intact, according to the filing. The club had proposed increasing golf memberships from 690 to 900 to increase revenue, the Times reported.
The settlement sprung from a conference with Melvin Hoffman, chief judge of the U.S. Bankruptcy Court’s Massachusetts district. It was held after members said negotiations had reached an impasse in July, the Times reported.
“The inherent risks of continued litigation create uncertainty, and there is no guarantee of success for either side,” wrote attorneys representing both the members and the club in the joint court filing proposing the settlement. “Without approval of the Settlement Agreement, additional litigation…would continue indefinitely. By entering into the Settlement Agreement, the Parties gain certainty and will not incur additional costs related to the Litigation. As the Litigation will be fully and finally resolved, this bankruptcy case can once again be closed.”
The settlement must be approved by the court before becoming official. A hearing is scheduled for August 19 in Boston, the Times reported.
New Seabury Properties, a subsidiary of Icahn Enterprises, a Delaware-based holding company, owns the club, its golf courses, tennis courts and a private beach. In March, it sent a letter to residents outlining six new membership categories offering a range of access to the facilities, the Times reported.
The most expensive category, a platinum membership, allows priority use of both golf courses, early access to tee times, priority use of the tennis courts and use of the New Seabury beach. It also comes with a $75,000 initiation fee, annual dues of $14,100 and a $1,200 food and beverage minimum for families, the Times reported.
Residents could keep their current membership level, but making that choice would increase dues by 20%-30%, according to a court filing, the Times reported.
The pending resolution to the federal lawsuit does not end a separate action in Barnstable Superior Court, however, where a different group of residents filed a lawsuit contending that New Seabury breached its contract with members. The residents are seeking to have that suit converted into a class action as well and have asked for an emergency hearing to stop the membership changes, the Times reported.