CLARKSBURG -- A Rhode Island financial firm is suing the former owners of the Pete Dye Golf Club for $3 million, the balance of a longstanding loan made before the firm bought the golf course at auction.
Textron Financial Corp., through subsidiary SPE GO Holdings, filed a lawsuit May 18 in U.S. District Court in Clarksburg against James D. and James J. LaRosa.
The complaint says the LaRosas breached a contract entered into with Textron related to a multi-million line of credit extended to Golf and Fairway, LLC, a company operated by the LaRosas to run the golf course.
Textron bought the Harrison golf club last year at a foreclosure auction for $7 million. The next highest bidders included former state senator and current House of Delegates member Mike Ross.
At the time of the sale, the public was led to believe that the out-of-state company simply swooped in and bought the golf club.
But, according to Textron's complaint, the golf club was auctioned off because the LaRosas had defaulted first on a $7.5 million loan from Textron and then on a modification to the loan agreement which brough the amount to $9 million, according to the complaint.
The first loan came in late 2001, just months after the LaRosas bought back the golf club from Golf Trust of America for nearly $16 million.
According to Textron's complaint, the modification to the agreement came after the LaRosas defaulted on the initial loan. The modification brought the principal amount of the loan to $9 million.
After the family defaulted on the modified loan, the golf club was put up for auction on Aug. 27, 2008, the complaint says.
Textron bid $7 million for the property. In its lawsuit, the company said that left an outstanding balance on the loan to the LaRosas of $2.7 million, plus accruing interest.
The company is asking a judge to award it more than $3 million in alleged debt from the LaRosas, plus interest accruing at 7.03 percent.
The company also wants reimbursed for legal costs.
David M. Thomas and Joshua S. Rogers are representing the plaintiffs.
U.S. District Court case number: 1:09-cv-66