The Vonore, Tenn., property will be sold in connection with a long-standing legal dispute between Knoxville developer Robert Stooksbury and his former business partner, Mike Ross. The decision comes as Stooksbury is seeking to collect damages of more than $36 million from Ross and several other defendants in connection with Rarity Pointe, a waterfront golf community.
A federal judge has ordered a receiver to sell assets including the Rarity Bay Golf & Country Club in Vonore, Tenn., in connection with a long-standing legal dispute between Knoxville developer Robert Stooksbury and his former business partner, Maryville developer Mike Ross, the Knoxville (Tenn.) News Sentinel reported.
The decision by U.S. Magistrate Judge Bruce Guyton comes as Stooksbury is seeking to collect damages of more than $36 million. Stooksbury had sued Ross and several other defendants in connection with Rarity Pointe, a waterfront golf community in Loudon County, the Sentinel reported.
Among other things, that suit alleged that the defendants diverted large portions of the capital from Rarity Pointe and other projects for their personal use and that Ross and other principals repeatedly made false statements about the defendants’ intentions to spend money on amenities at various Rarity developments, the Sentinel reported.
Ross and other defendants denied the allegations, but in 2012 a default judgment was entered in the case, the Sentinel reported.
A jury subsequently awarded Stooksbury compensatory damages of more than $3.5 million on RICO violations, and $11.3 million for state-law claims, plus an additional $15 million in punitive damages. The district court later trebled the compensatory RICO damages, the Sentinel reported.
That same year, former Knoxville Police Chief Sterling P. Owen IV was appointed as a receiver, after Guyton ruled that fraudulent conduct had likely occurred, related to conveyances of property by Ross and others, the Sentinel reported.
The Rarity Bay golf course and clubhouse were transferred to an entity called American Harper Corp. in March 2012, shortly after a jury issued the judgment against Ross and other defendants, the Sentinel reported.
This week Guyton ruled that title to those assets and others is actually held by Rarity Management Co., essentially upholding Stooksbury’s position that they were fraudulently transferred to American Harper, the Sentinel reported.
The order states that Stooksbury can submit a credit bid. That means that rather than making a cash offer he can forfeit a portion of the judgment owed to him in exchange for the properties, the Sentinel reported.
Ross and an attorney for American Harper could not be reached by the Sentinel for comment.
In a prepared statement, Stooksbury attorney Wayne Ritchie said his client “appreciates the Court’s thorough consideration of the facts and law in this case, as well as Mr. Owen’s work as the Receiver. Mr. Stooksbury hopes the next steps will allow the development and properties to begin to recover.”