The former owner of Sunday River Golf Club in Newry continues to market and sell memberships for the upcoming golf season despite losing the property in January to a creditor, according to a lawsuit filed by the club’s new owner.
The dispute raises the possibility that some people who paid for memberships will not have access to the golf course, which consistently has been rated as one of best in Maine by national golfing publications.
The legal complaint, filed in Cumberland County Superior Court, alleges that SR Golf Holdings LLC and its parent company, Harris Golf Inc. of Bath, have refused to hand over assets such as equipment and membership fees they have collected since the property was conveyed on Jan. 5 to the new owner, Portland-based Newry Holdings LLC.
Meanwhile, Harris Golf continues to advertise and “collect fees for an upcoming golf season which SR Golf will not be participating in,” the complaint says.
“SR Golf is converting fees paid by individuals who are under the impression that they are receiving the right to golf at the Sunday River Golf Club in return,” it says. “If SR Golf is allowed to continue holding itself out as owning and operating the (property), then the number of individuals who will be financially harmed will exponentially increase.”
The complaint’s language suggests that Newry Holdings does not intend to honor memberships sold by Harris Golf unless it is able to collect those membership fees through the lawsuit. The attorney for Newry Holdings did not respond to a request for clarification on that issue.
As of Tuesday, Harris Golf websites continued to market and advertise memberships and clubhouse rentals for the Sunday River club, but the phone number for sales was disconnected. Harris Golf owns several other golf properties in Maine, including Falmouth Country Club and Freeport Country Club.
Harris Golf’s attorney, Tom Hallett, said he is “not in a position to talk too much about the lawsuit.” Still, he said the golf club rightfully belongs to SR Golf and Harris Golf.
“The deed to the property was improperly executed,” Hallett said.
Harris Golf filed a counterclaim Tuesday alleging that Newry Holdings and a previous creditor, Boothbay Pool I LLC, violated a forbearance agreement that would have enabled SR Golf to use new financing to meet its financial obligations and retain ownership of the golf club.
MEMBERSHIPS IN QUESTION
Newry Holdings is seeking $5.6 million in unpaid mortgage debt plus legal fees, along with all remaining golf club assets held by SR Golf including equipment and new membership fees it has collected. The complaint says $5.6 million is the difference between what SR Golf owed on the mortgage ($7.8 million) and the value of the property ($2.2 million).
Newry Holdings also is asking the court to bar Harris Golf from marketing the Sunday River club as its own property and selling memberships.
Online property records from the Oxford County East Registry of Deeds show that on Sept. 10, 2012, SR Golf manager Jeff Harris signed a document called a deed in lieu of foreclosure pertaining to Sunday River Golf Club. Such documents primarily are used to convey mortgaged property from a borrower in default on a mortgage to the mortgage lender without going through the foreclosure process. The document was not recorded by the Registrar of Deeds until Jan. 5 of this year.
According to the Newry Holdings complaint, SR Golf was given multiple opportunities to “cure” the default situation but failed to do so. Therefore, the deed in lieu of foreclosure was executed in January.
But Harris Golf argues in its counterclaim that it had secured financing to avoid default in late 2016, but was unlawfully prevented by Boothbay Pool and Newry Holdings from completing the deal. It is seeking the return of the golf club’s property and assets.
Newry Holdings plans to hold an auction March 15 for all of the equipment and other assets associated with the golf club, including the domain name sundayrivergolfclub.com. Harris also maintains the website sundayrivergolf.com.
Newry Holdings’ attorney, George Marcus, said the auction is a necessary legal step for his client to exercise its right of ownership to those assets.
He said that Newry Holdings expects to place the winning bid, and that if it is not the winning bidder, it will use the proceeds from the asset sale to buy new equipment.
Either way, Newry Holdings intends to own and operate the golf club, he said. The company also owns Black Swan Country Club in Georgetown, Massachusetts.
But Hallett, Harris Golf’s attorney, doubts the auction will take place as scheduled in light of Harris Golf’s counterclaim.
“I can assure you that in my opinion, that is very unlikely,” he said.
Sunday River Golf Club, a semi-private course, features an 18-hole, 7,130-yard layout designed by Robert Trent Jones Jr., in addition to a log-built clubhouse with a pro shop and restaurant, a large putting green and a mountainside practice facility with a driving range and target greens.
The cost of membership in 2015 was $995 for new members and $1,195 for returning members.
Construction on the course began in 2003 and was completed in 2005. It hosted the Maine Amateur Golf Championship in 2012.
Newry Holdings was not SR Golf’s original creditor, according to court and registrar documents. The original, $4 million mortgage agreement for Sunday River Golf Club was signed in 2003 between SR Golf and Gardiner Savings Institution, which later became part of The Bank of Maine, which was purchased in 2015 by Camden National Bank. The mortgage agreement was modified in 2007, when the loan principal was increased to $5.3 million.
In 2012, The Bank of Maine sold the promissory note associated with the mortgage. The note was purchased by Boothbay Pool, which then sold it to Newry Holdings.
Despite being owned and operated independently, the golf club has been a key marketing partner with nearby Sunday River Ski Resort and has helped boost the resort’s off-season business.
Darcy Lambert, the resort’s director of communications, said her employer plans to continue its relationship with the golf club regardless of who owns it.
“We look forward to working with the new owners,” Lambert said.
J. Craig Anderson can be contacted at 791-6390 or at:
Twitter: jcraiganderson
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