Donald Trump isn't known to shy away from a fight. He may have one on his hands on Long Island, at the historic country club he is trying to acquire.
The potential sale of Engineers Country Club in Roslyn Harbor, N.Y., to Trump Golf may face a legal hurdle prior to the membership vote on the matter, reportedly scheduled to take place in mid-to-late January. On December 20, Larry Hutcher, a lawyer for an unnamed group of Engineers members operating under the banner "Association for a Better Engineers" ("ABE") sent a strongly worded letter to Engineers CC's Board of Directors, stating: "While we are prepared to commence an action and move for injunctive relief to enjoin the Board's submission of this proposal to the entire membership of the Club for a vote, my clients and I would prefer to try to amicably resolve this matter."
The letter — a copy of which was obtained by this blog — goes on to say that "each and every board member must understand the grave exposure you have both as a board member and in your individual capacity in the event you proceed with the proposed transaction in the existing improper manner." It accuses Engineers' board of having "completely and abjectly failed to do even the most basic due diligence" — including its purportedly neglecting to secure an independent appraisal of the club's assets or seeking out other third-party offers besides Trump Golf's. "The failure of the Board and each of its members to take these most fundamental steps constitutes a gross and egregious violation of their respective fiduciary duties which will expose each of you to serious, personal economic risk," the letter says.
Quoting a September 3, 2010, email to Engineers members from club president Robert Scheinman stating that the club "is on solid financial ground" and its "cash position is strong," Hutcher argues that there is no urgency regarding any potential sale and describes the dealings with Trump Golf as occurring at "breakneck pace."
A source at the club who spoke on the condition of anonymity had previously described an acrimonious divide between long-time Engineers members and newer members who had recently converted trial memberships into full memberships. The former group, said the source, was more likely to be opposed to a sale to Trump Golf than the latter group. The "ABE" letter puts a finer point on the issue — and suggests it is another potential cause for legal action.
"We are of the opinion that the sudden and recent conversion of the many ‘trial' members to full membership — which certainly occurred for the sole purpose of enabling them to vote on the issue of a sale to Trump — is a miscarriage of the intent for which these trial memberships were created," the letter states. "Surely, it was never contemplated that these trial members who had no stake in the Club would suddenly be able to control its destiny."
The letter opines that, if necessary, "ABE" will be able to prevent a vote of the membership on a sale until the issue of who may vote is determined in court.
"ABE" and Hutcher did not describe their own proposed plans for the club. They did, however, ask for a 60-day "cooling off" period to give "ABE" and the Engineers board a chance to meet. Failing that, however, there was the clear intimation of a court fight ahead.
"Absent the Board's immediate written consent to a stay, we have been instructed to take whatever action we deem necessary to protect our clients' interest....
"Please be guided accordingly," the letter ends.