Sundale Country Club is back on the auction block after efforts to sell the club and its 18-hole golf course erupted into a legal fight.
Court records show the club's majority owner, Young Ohr, was in escrow late last year to sell the southwest Bakersfield property for $4.4 million to a group of investors led by local businessman Randeep Dhillon.
But when two property appraisals came in well below the asking price — the first valued the club at about $1.5 million, the second just below $2.6 million — the buyer and seller negotiated an agreement for Dhillon's group to buy out Ohr's ownership of the business that operates the club, court records state.
That's when things started to fall apart.
Accounts vary on what caused the discord, but ultimately Dhillon and his partners at Bakersfield-based Duniya Group Inc. quit making the loan payments that had rescued Sundale from foreclosure proceedings, according to the court records.
As a result, the club's real estate is scheduled to be sold at public auction at 10 a.m. Aug. 21 on the steps of Bakersfield City Hall, according to real estate records.
In a twist, the club's debt is no longer held by Los Angeles-based Hanmi Bank; it was purchased last year by Bakersfield businessman Girish Patel and another investor.
That means if no one buys the club at auction then Patel's group will own it — and it will be up to them whether any of the golf course will be redeveloped into new housing, as allowed by the property's deed restriction but opposed by residents of the surrounding Kern City retirement community.
Patel said Thursday he and his partner are undecided whether they would exercise the housing option coming up in 2022, adding "we haven't made a final decision yet."
The whole situation has left Kern City residents wondering what's going on.
"Unfortunately, we don't know any more than we read in the paper," said Jolene Simons, president of the Kern City Homeowners Association.
"Are (residents) concerned? Yeah," she said. "Kind of like before, they want to see it stay as a golf course."
The lawsuit Dhillon and Duniya filed April 29 in Kern County Superior Court against Ohr and three of the club's minority owners states the would-be buyers paid $433,000 to cure the property's loan default, plus three or four months' mortgage payments of $26,222.40 each.
NO MORE PAYMENTS
Those payments stopped, according to the lawsuit, partly because the defendants refused to provide promised profit-and-loss statements and other financial records. Another reason Dhillon's group says it quit paying the mortgage is because the property did not meet the appraisal price the club's sale was contingent upon.
"He's not releasing the financials," Dhillon said in a phone interview Thursday. He further alleged Ohr told him the management business owned golf carts and various other assets that were actually leased from a third party.
But Ohr, who did not respond to requests for comment, filed a cross-complaint June 18 alleging Dhillon had begun offering unwise business advice that put the club in "a worse situation than it was" in prior to the purchase agreement.
Ohr's suit further asserts the agreement to sell the business was supposed to leave him as manager of the club and that "he shall do his best to help the proposed new owner for the company."
Dhillon's suit alleges breach of contract, deceptive practices and other offenses. It asks the court for compensatory, special, treble and punitive damages to be determined by a jury trial.
Ohr's cross-complaint accuses Dhillon and Duniya of breach of contract and breach of implied covenant of good faith and fair dealing. It seeks general, special and consequential damages of at least $800,000, plus punitive damages and court costs.