Former investors of Stallion Mountain win judgement against Walters

Bill Walters ugly exit from Stallion Mountain Country Club in Las Vegas, got a little uglier last week when a court ordered the Las Vegas golf course developer and owner to pay $3.26 million in back rent, and then set a trial date for December to determine if there were additional damages.

 
The civil lawsuit by 26 limited liability companies is against Walters, Walter Luce, manager of Walters Golf, and Joe Munsch, president of Eagle Golf Management, which managed the course after the sale. It alleges that Walters defrauded investors in the sale of Stallion Mountain Country Club in 2006.
 
Walters sold the course to a group of investors for $24.4 million, and bundled it with a leaseback to LeaseCo, the management arm run by Luce. Under terms of the lease, LeaseCo would pay monthly rent to the investors. The sale was financed through a $15.2 million secured loan on the property with Bill Walters as personal guarantor.
 
At the time of the sale, the lawsuit alleges that Walters told the investors the course would have $6.25 million in cash flow and a net profit of $54,173. But, it alleges, the management company had internally budgeted gross revenue at $4.87 million for the same period, with a negative net of $684,899.
 
LeaseCo stopped paying rent in July 2007, which forced the investors to make the loan payments to prevent foreclosure.
 
Community Bank of Nevada foreclosed on the course in 2008, and the FDIC seized the bank in 2009. It was recently sold to Ohio-based Tartan Golf Management for $3.8 million.
 
The investors allege that Walters and the other defendants "target(ed) potential investors with little or no knowledge of the golf course business generally or the Las Vegas golf market in particular" because they knew someone knowledgeable about the industry would not pay the inflated price for the course.
 
Bill Walters is also currently in the news for Bali Hai Golf Club. Walters built the golf course after securing a 99-year lease with the airport. However, the profit-sharing lease has yielded zero rent on the 155 acres for the county because the golf course has never made a profit.
 
Walters wants to sign a new lease that would allow him to scrap the golf course and build a 2 million-square-foot warehouse and retail center on the county-owned land. He has agreed to pay $100,000 monthly rent, which some critics argue is still too low.
 
 

Comments

Their is a Tartan Golf in Ohio that owns/manages, but the recent sale of Stallion was to Tartan Golf of Colorado. Tartan is owner with OB managing.

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