The multimillion-dollar sale of the Minnetonka Country Club, one of the oldest golf courses in Minnesota, is under dispute after the owner's sister filed a lawsuit Friday.
The 116-acre plot near Lake Minnetonka is slated to become the Twin Cities' latest golf course-turned housing development, with 121 homes priced at up to $1 million on Shorewood's largest parcel of open land.
But in the lawsuit filed Friday in Hennepin County District Court, owner Bill Witrak's sister, Bonnie Witrak, accuses him of illegally selling the nearly 100-year-old country club without the consent of the club's shareholders — all family members.
"We're uncertain what the best route to go [with the property], but moving forward with a decision without a shareholder vote is not the right way to go," said Benjamin Skjold, the attorney representing Bonnie Witrak. "We don't view this as a family dispute, but more of a corporate dispute. It's important for shareholder votes before the sale. … It's not really a fair vote."
The lawsuit could stall the project's process, the city says, if it affects the developer's control over the property — something the developer and owner Bill Witrak doesn't expect to happen.
"The lawsuit has no merit and [Minnetonka Country Club] is moving ahead in concert with Mattamy [Homes] as previously planned," he said via e-mail.
The country club, which opened in 1916 and survived two clubhouse fires over its 98 years, boasted of being one of the oldest continuously active golf courses in Minnesota until closing Dec. 31 — one of 18 golf courses to be closed across the state since 2006. It abruptly announced its closing to club members in October, citing increased costs of keeping up the clubhouse and the 18-hole golf course in light of decreasing revenue.
Some longtime club members tried to come up with a way to save it from shutting down. Then, earlier this month, Canadian-based developer Mattamy Homes presented preliminary concept plans to the city's Planning Commission for 121 high-end homes, the first step in a lengthy public approval process.
Siblings at odds
In Friday's lawsuit, Bonnie Witrak, a minority shareholder, says her brother took control of managing the country club from their father in 2014 and started marketing the property that summer and fall. In November, he signed a letter of intent with Mattamy Homes for the sale of the property and, according to the lawsuit, the purchase agreement was for $15 million — under the appraised value of more than $20 million, the lawsuit says.
Bonnie Witrak accuses her brother in the lawsuit of failing to "exercise reasonable care in the operation of the golf course and sale of assets" by hiring or consulting with country club professionals to operate the club in a profitable way, then closing it and selling all personal property without shareholder consent and failing to get an independent appraisal on the land.
In a statement, Bonnie Witrak said their father had run the club for more than 40 years until his recent death.
"[I]t is a travesty that it would simply be sold without a shareholder vote and some discussion with the stakeholders," she said in a statement. "This property has been in our family and in the community for decades, and its future is deserving of a process that is inclusive and diligent, which has not been the case and that is why I am now taking the action that I am."
Mattamy plans to build 121 homes, priced from $800,000 to $1 million, clustered to preserve about 60 acres for undeveloped wetlands, trails and public or private space. Most of the construction isn't planned on the site, near Hwy. 7 between Lake Minnetonka and Lake Minnewashta, until the public approval process is finished, likely in 2016.
"We're proceeding," said Steve Logan, Minnesota division president of Mattamy. "We're not overly concerned."