Threat of fire-sale at top golf resort after legal action launched in US
The exclusive Doonbeg golf course in Co Clare risks succumbing to an asset fire-sale after legal action was launched in the US.
The five-star Doonbeg resort -- built at a cost of nearly €30m -- is part of the South Carolina-based Kiawah Resort Associates group.
The company's minority shareholders have filed a lawsuit claiming that Charles 'Buddy' Darby -- the majority owner of the firm -- has been "siphoning off" and "misappropriating" income and assets for the benefit of himself and his family.
The minority owners -- who include members of Mr Darby's extended family -- want a Carolina court to order that both Doonbeg and a resort on the paradise Caribbean island of St Kitts -- Christophe Harbour - be sold off and the proceeds distributed amongst all the beneficial owners.
In a lengthy complaint just filed in a Charleston court, minority owners of Kiawah Resort Associates have made a number of allegations.
They claim Mr Darby has engaged in a "systematic, unremitting course of conduct" over a number of years to exclude minority partners from the business and affairs of the Kiawah operation.
They say they've been denied access to corporate information and that Mr Darby has attempted to "freeze them out".
Mr Darby, court documents say, secured majority control of the Kiawah business in 1997. The minority partners allege that he has effectively operated the business as his own.
"There is no board of directors to oversee Buddy Darby's total dominion" of the Kiawah business, they've told the court. They say he has also "unilaterally directed profits" from Kiawah businesses to himself and other businesses that have links to his own immediate family.
Mr Darby told the Irish Independent that all the allegations being made against him were baseless.
"Personally, I am disappointed that this action has been taken," he said. "I would have hoped that the matters could have been resolved out of court and that is still my wish."
The minority investors want a number of partnerships dissolved and the assets held by them sold.
That raises the prospect of Doonbeg, whose spectacular setting at Doughmore Bay lured singer Andrea Corr to host her wedding to Brett Desmond there in 2009, being put up for sale in a market where asset values have plummeted.
Mr Darby said yesterday that the Kiawah group remains "fully committed" to Doonbeg and its "continuing success now and in the future".
The luxury resort, which includes a golf course designed by legendary player Greg Norman, has been accumulating heavy losses. Latest publicly available accounts for the operation show it made a €5.8m loss in 2010. While that was down on the €7.7m loss it recorded in 2009, it has piled up a total of €48m in losses -- half of which is as a result of non-cash items. The group hopes the resort will be profitable by 2014.
Launched a decade ago by Kiawah, the Doonbeg resort had at one stage been charging membership fees of €35,000 for its golf course, while some of its suites were for sale at prices of more than €1.1m.