Club owners kept $1M in dues this year, attorneys say
EAGLE, Colorado – The Cordillera Club owners collected $8 million in membership dues this year and paid themselves almost $1 million, while refusing to open three Cordillera golf courses, say attorneys for members suing them.
District Court Judge Fred Gannett ruled Tuesday that Cordillera Club members could sue David Wilhelm and his son Patrick Wilhelm as a group – a class action.
“There are way too many people who have the same common issue of fact, which is, ‘I paid money, and if I paid money for something, did I get it?'” Gannett said in his ruling immediately after the Tuesday morning hearing.
So far this year, 313 of the Cordillera Club’s 586 members have resigned, Tuesday’s court testimony revealed. However, they still had to pay this year’s dues of at least $13,500.
Cheryl Foley is a Cordillera Club member, resident and the lead plaintiff in the class-action suit against the Wilhelms. She testified Tuesday that around 200 members have contributed to the legal fund.
Cordillera homeowner Walter Copeland, a corporate chief financial officer, said he was part of a forensic audit of the club’s books. As of Oct. 31, the Club had $401,000 in cash left and the Wilhelms had enough money to operate all its facilities this summer, Copeland testified.
Brett Heckman, the plaintiff’s attorney, then told Gannett that the club paid the Wilhelms $952,000.
Rob Ingram, the club’s attorney, countered that the reduction in memberships meant a reduction in cash available, which forced the Wilhelms to order that three of Cordillera’s four courses would not open.
On May 24, David Wilhelm sent club members a long email saying everything would be closed except the Valley course, which had opened earlier in the spring.
That followed a series of emails in January and February that reassured members that all of Cordillera’s facilities would open for the coming summer, according to testimony.
“I paid my dues based on the representation that all club facilities would be open. I look forward to the summer every year. It’s the highlight of the year, and I was just devastated,” Foley said.
At the bottom of that May 24 email, Wilhelm told Club members that he’d filed a “massive” lawsuit against some of them for $96 million, saying they’d defamed him and were trying to squeeze him out of the business.
The members held an impromptu meeting over the Memorial Day weekend, and some of them decided to return fire.
“They paid their dues because the email came out,” Foley said. “They were very upset and either wanted to sue or were happy that we were suing on their behalf.”
Their lawsuit asserts that by failing to open the courses and many of the facilities that go with them, the Wilhelms violated the membership agreement.
The lawsuit asks that the 2011 dues be repaid and that all of the membership deposits be refunded.
That’s between $70 million and $100 million, said Mary Kulzer, Cordillera Club vice president of development and director of operations.
“If the plaintiffs prevail in this lawsuit, they’ll obliterate everyone and everything. It’ll be scorched earth,” Ingram said.
The plaintiffs have a conflict because if they win, they hurt the other members, Ingram said.
If the plaintiffs win, “the club would be bankrupt,” Kulzer said.
The plaintiffs say they had to pay their 2011 dues before they could resign. So even though Wilhelm no longer had them, he had their money.
Wilhelm also owes Alpine Bank $19.4 million in two loans – one for $12.7 million and another for $6.7 million, according to testimony Tuesday. He took on those debts when he acquired the Cordillera Club from former owner Felix Posen.
The Wilhelms have made some of the interest payments, Alpine Bank’s attorney told Gannett.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or firstname.lastname@example.org.