Oklahoma City-based First Liberty Bank claims in court documents that the Arkansas-based owners of Gaillardia Golf and Country Club have been so short on cash in recent months that the exclusive club is in danger of not being able to afford to water its greens this summer and that creditors have threatened to repossess its golf carts.
The bank moved to foreclose on the Arkansas-based owners of Gaillardia Golf and Country Club late Friday and has asked the court to place the club into the hands of a receiver to protect the property from further damage.
In court documents, First Liberty Bank claims Gaillardia’s owners owe the bank more than $1.5 million, plus more than $19,000 in interest on loans it extended to the country club in 2012 and 2013.
First Liberty claims the club ownership also owe $6.8 million on a first mortgage to Bank of the Ozarks, plus $460,000 in overdue property taxes, according to court documents.
Faced with ongoing cash shortfalls, four exercise machines were recently repossessed by creditors at Gaillardia and food and beverage vendors have placed the club on “cash on delivery” status, First Liberty claims in court documents.
Gaillardia’s sole source of irrigation water for its 18-hole golf course is in jeopardy after it has lagged in paying the Oklahoma City Water Uitlities Trust a lump sum required to secure water rights, the bank claims. Gaillardia’s owners have delayed closing the water rights agreement four times and the course could be “irreparably” harmed without water this summer, the bank claims.
The roof of the 55,000 square-foot Gaillardia club house leaks after sustaining hail damage, but the owners have yet to have it repaired although they received insurance money for the damage, the bank claims in its lawsuit.
“Despite numerous requests, (the) owner has been unable to properly account for membership dues and revenue from banquets and other events,” First Liberty said in its motion to appoint a receiver for the property.
First Liberty has offered to extend the club a short-term loan once the property is in receivership if the club is unable to make payroll or pay other creditors, the bank said.
Joey Root, First Liberty Bank president and CEO, said in a statement that he hoped the club would remain open during the court proceedings.
“It is unfortunate the club faces a variety of financial challenges in addition to its obligations to First Liberty Bank,” Root, a member of the country club, said in the statement. “After much effort, First Liberty was unable to reach common ground with the borrower on a viable solution.”