One of Central Florida’s most troubled home developments, the upscale Bella Collina country club near Clermont, has been hit with a proposed class-action lawsuit by people who bought lots there before the development went dormant in the Great Recession.
The lawsuit alleges that the owners behind the Bella Collina company, including Palm Beach businessman Dwight Schar, actively sought to destroy property values in order to drive out lot owners so they could repurchase the entire project at super-low prices.
The lawsuit alleges Schar and his companies engaged in racketeering, embezzling and conspiracy.
Schar and his local business partner, Randall Greene, aren’t commenting.
A company backed by Schar called DCS bought Bella Collina lots, the Nick Faldo-designed golf course and the $40 million clubhouse in 2012 for just $10 million.
They had announced new sales would start again in 2014, but there’s been little new construction visible on satellite photos.
Attorneys representing the development have fired back in several court filings, arguing that the plaintiffs in the new lawsuit have already litigated and settled several of the arguments, and that the lawsuit represents a “shotgun” pleading and should be tossed out.
The lawsuit was filed by Orlando attorney Tim McCullough on behalf of lot owners James and Virginia Shelton, Brad and Lana Heckenberg, Bart and Kathryn Sutherin and two others.
They argue that the developers should have turned the Property Owners Association over to the individual owners more than 10 years ago.
“The Defendants illegally usurped control of the POA. The POA, without member authorization, then filed 400 fraudulent lawsuits for the collection of invalid special assessments, which coerced lot owners to surrender their lots,” the lawsuit says.
A response from the developers filed in court says it’s all just sour grapes.
“Many had enjoyed their property for years without paying club or POA dues. They reacted poorly when the POA pursued legal remedies to require the owners to pay their debts,” the developers’ attorneys at Shutts & Bowen wrote.
McCullough said there are about 100 individual lot owners now, out of about 800 lots.
“There are issues that have been raised in the state court, but the state court lawsuits were not a class action,” McCollough said. “Some of these lot owners are simply afraid to open their mouth. They can be slapped with a $100,000 penalty, which I think is illegal, if they don’t follow the illegal deals in the settlement agreements some people signed.”
Wyndham Worldwide’s former timeshare division CEO, Franz Hanning, is getting a severance payment of $3.4 million, according to a filing with the U.S. Securities and Exchange Commission.
Hanning was chief executive of Wyndham Vacation Ownership, the Orlando-based division of Wyndham (NYSE: WYN). He and many other executives for Wyndham live in the Orlando area.
In late November, timeshare owners received a letter announcing that Hanning was stepping aside. His position was to be covered, temporarily, by Wyndham Worldwide CEO Stephen P. Holmes.
The company has since revealed Hanning’s termination agreement, including the $3.4 million severance, to be paid in full by mid-April.
Over three months later, on Friday, a spokeswoman for the company said Holmes is still interim CEO. The company did not respond to questions asking whether a search was still ongoing.
Hanning had been with Wyndham or its predecessor since 1982, according to reports in industry trade publications. He had also served a term as chairman of the national timeshare association, the American Resort Development Association or ARDA.
At the time Hanning announced he was leaving, a writer for financial news website SeekingAlpha said the timing was suspicious because Wyndham’s timeshare operation had lost a $20 million whistleblower lawsuit regarding timeshare-sales fraud on elderly customers.
In that lawsuit a San Francisco jury awarded $20 million to Trish Williams, a former Wyndham timeshare sales representative, saying she had been wrongfully terminated for reporting timeshare fraud on the elderly.
She had reported fraudulent selling to elderly customers in 2010, in which false promises were made verbally.