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Former investors of Stallion Mountain win judgement against Walters

Jack Crittenden
By Jack Crittenden

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.

text-autospace:none”>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.
text-autospace:none”>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.
text-autospace:none”>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.
text-autospace:none”>LeaseCo stopped paying rent in July 2007, which forced the investors to make the loan payments to prevent foreclosure.
text-autospace:none”>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.
text-autospace:none”>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.
Jack Crittenden
Jack Crittenden
Jack Crittenden is an award-winning journalist with more than 35 years of news experience. He has run Golf Inc. magazine since 1998, serving as Editor-in-Chief for most of that time. Crittenden is CEO of Crittenden Research, a media company in the law, real estate and medical liability insurance industries. He grew up in California and graduated from the University of Southern California with a degree in public administration, specializing in urban planning. He graduated from American University’s Washington College of Law. He has run his company since 1991.

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