VAIL—A mediation in Denver this month among parties involved in various lawsuits at the Club at Cordillera, one of Vail’s most prestigious neighborhoods, resulted in an agreement to end legal wrangling and sell the club by the end of the year. The complex deal still needs to work its way through federal bankruptcy and county court systems, but club members and owner David Wilhelm, who filed for bankruptcy in June, agreed to a sale that would be finalized just after Christmas.
According to the agreement, cash bids are due by the first week of December. Community groups, outside parties and Wilhelm are allowed to bid for the exclusive club that includes four golf courses and other amenities in the 12-square-mile private residential development.
Multiple bidders will induce an auction to be held Dec. 10.
Wilhelm and the club members agreed during the Sept. 12-13 mitigation to drop claims against each other, according to the agreement.
“I am happy that we were able to come to a resolution of disputes that have affected our homeowners, club members, the community and my family for more than two years,” Wilhelm said in a statement Wednesday. “It’s time to move on in the most positive way.”
Cordillera property owners have been embattled with their club owner for at least two years, with disagreements reaching a peak last summer when Wilhelm did not open three of the courses.
Members sued Wilhelm and the Wilhelm Family Partnership in a class-action that could have cost him up to $100 million in past dues and membership deposits. They complained they paid their dues after Wilhelm promised in writing to open the courses, but ultimately were unable to enjoy the facilities.
Wilhelm had filed his own lawsuit against groups of homeowners for $96 million, saying they were trying to force him out. Wilhelm acquired the club in 2009 from prior owner Felix Posen, who also experienced financial troubles managing the community. According to reports in the Vail Daily at the time, Wilhelm intended to turn the club around by gaining new memberships that would help pay for the many amenities.
But instead of gaining new members, several hundred quit over their dissatisfaction with management. At the same time, the national housing bubble burst, golf club memberships across the nation sagged, and Wilhelm filed for Chapter 11 bankruptcy, owing Alpine Bank a reported $19.4 million, debts he acquired when he took ownership.
Property values at Cordillera have dropped by 30 percent but it’s unclear how much of the decline is due to problems with the club or the housing crash. Sales in Cordillera came to a near stand-still, and both sides have expressed a desire to end the problems and move toward a resolution.
The Cordillera community consists of more than 1,000 homesites, where about 600 homes have been built.
Property owners paid $35,000 to $175,000 for club memberships, plus $13,800 a year in dues. Cordillera homeowners are among some of the wealthiest in the nation, with custom homes valued in the multi-millions.
Club members were told in an e-mail briefing on the mitigation outcome that they would be allowed to make claims for club deposits in bankruptcy court, but given Wilhelm’s financial position, “it is unlikely there will be any recovery” of their money.
Wilhelm’s statement did not say whether he intends to bid for the club. He was quoted in 2010 saying it was worth $50 million but given current circumstances, it’s now likely worth much less.
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