Fourteen shareholders from the Conway Golf Club, Inc., have filed a motion in Horry County court asking to intervene in litigation concerning the club and its likely upcoming sale, but an attorney for the club believes the intervention will hurt rather than help the shareholders.
Myrtle Beach attorney Douglas M. Zayicek said if the sale goes through on the current contract it will generate a substantial amount of money for the shareholders. However, the shareholders’ intervention could tie up the sale long enough that the club is forced to declare bankruptcy or the bank holding its mortgage will be forced to foreclose. If either or those happens, the property will be sold by the court for pennies on the dollar.
Zayicek says it has always been the board’s objective to make everything as public as possible and having it in the court’s hands initially made it open to everyone.
Members of the group that has filed to intervene have expressed concern among themselves about the way the issue has been handled. They have gathered several times to discuss the possible sale and immediately saw a need for someone to try to determine who the current, legal shareholders actually are.
But Zayicek says verifying the shareholders is a job for a judge to do after the sale is made.
Randy Beverly with Beverly Homes holds the contract on the property. He plans to develop the 66 acres into a housing development with 180 to 200 homes.
Although the contract amount has not been disclosed, Zayicek calls it a good price and say selling to Beverly is the best option for the club that owes money to a bank, a golf cart provider and a roofer.
He also says that recent damage to the club has added another level of concern for the financially-strained club.
“The best thing for all the shareholders is to have it sold at that price, so the board is trying to do the judicious thing to preserve as much equity as possible for the shareholders,” he said.
He called it a two-step process, saying the first step is to get the club sold and the second is to determine who the proper shareholders are. He sees problems if people start fighting now before the property is sold because that could land it in court sale.
The motion to intervene says the shareholders are not adequately represented or protected by the existing parties in the litigation that was initially filed by Judy Edwards, a former employee of the club’s snack bar, who asked the court to dissolve the corporation that governs the club.
Her filing claimed that the club has financial liabilities and will soon be insolvent. The board responded through Zayicek that it has debts, but it isn’t insolvent.
Myrtle Beach attorney Reese Boyd then wrote a letter to the board asking for documents including the shareholder’s log book; minutes from shareholder, board or special meetings for the past two years; copies of information establishing a quorum at those meetings; copies of policy manuals or “rule books” for the board; the number of outstanding shares; the number of unsold shares; and a list of the club’s obligations.
He says in Tuesday’s filing that the requested information was not provided.
Boyd also wrote that the shareholders are troubled by recent information about the three arrests of Christopher Ross, 53, that happened at the club this past week. City Judge Jane Mackey decided this past week to keep Ross in jail until he makes his first appearance in city court in June. Among Ross’ charges are malicious injury to property, $2,000 or less; trespassing; resisting arrest; third-degree burglary and second-degree burglary, according to Horry County jail records.
“The intervening shareholders are concerned that Ross may have been on the premises of the Club for the purposes of altering, amending, or destroying the corporate records of the Defendant Conway Golf Club, Inc., or for other illicit purposes that will otherwise be potentially detrimental and harmful to the Intervenors’ interests,” the motion for intervention says.
Boyd contends that if the club is dissolved the intervenors’ shares in the Club will be “effectively worthless, unless they are awarded further relief by this Court, and the Intervenors believe that their interest, under these unusual circumstances, are not adequately represented or protected by any of the existing parties to this litigation.”
