One of President Donald Trump’s golf clubs must immediately repay $ 5.7 million to 65 former members of his Jupiter, Fla., club who were denied refunds of their initiation fees after the Trump Organization purchased the club in 2012.
Federal District Judge Kenneth Marra ruled Wednesday that Trump National Golf Club in Jupiter violated contracts the members had signed with the previous owner, Ritz-Carlton. The ruling was made after a trial that ended in August.
When Trump purchased the club in 2012 for $ 5 million, the 65 members in the suit elected to go on a resignation waiting list. As part of a condition of the purchase, Trump got a below-market price for the club in exchange for taking on the liability of a potential $ 41 million in refundable initiation fees. In their contracts, members were afforded the right to withdraw membership, leaving the new owner, Trump, on the hook for the initiation refunds.
However, membership contracts detailed a potentially lengthy process for getting the refunds. Members had to request to be added to a resignation list, with those exits only granted when five memberships were sold in the respective resigning member’s classification. In the intervening time, the members were obligated to pay club dues and the food-and-beverage minimum, totaling anywhere from $ 9,800 to $ 21,800 per year, while maintaining access to the club.
Trump told members after his purchase that members on the resignation would not be allowed to access the club if they didn’t withdraw their names from the list before Jan. 1, 2013, maintaining that these in-limbo members would still have to pay dues despite having their access cut off. That prompted the lawsuit.
Trump’s son, Eric, said in testimony that paying dues without having access to the club “would violate a fundamental principle of life.”
The Trump Organization has argued that the club was in such dire financial straits when the purchase was made that the 65 members would have otherwise been unlikely to get their initiation fees back from Ritz-Carlton.
The average payment will be about $ 87,000 if the ruling is upheld. The Trump Organization is planning an appeal.
Ryan Ballengee is a Yahoo Sports contributor. Find him on Facebook and Twitter.
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