Here’s a memo from LHCC’s former attorney, Steve Moriarty, to Howard Cihak, LHCC’s former GM. The topic: running water & sewer throughout Section 8A.
The plan then under discussion ran something like this:
- convince lot owners to give their lots back to LHCC
- LHCC runs water & sewer to all lots in the section
- Selling the lots at “substantially higher prices”
The little wrinkle that would make this scheme work? Not candidly disclosing the plan to lot owners being asked to give their lots back to LHCC. As Moriarty himself said:
…[p]ublic disclosure of this plan would jeopardize its full potential.
The other complicating factor: the “buyer” would be represented by “directors who owe a fiduciary responsibility to the seller.”
In the end, Moriarty advised that it was a “brilliant way to take advantage of assets….” Are membership lot owners “assets” to be taken advantage of? Keeping in mind that LHCC was considering withholding utility extension plans from people it had a fiduciary obligation to serve and protect to get them to act against their own self interest, is it any wonder LHCC leaders were checking with their lawyer on the law of fraud?
We’ve covered LHCC’s longstanding shabby treatment of membership lot owners. In June of 2007 Wayne Poyer wrote that LHCC was “very aware of the troublesome plight in which Membership Lot owners find themselves. It only makes sense that LHCC has such awareness of that plight, because the organization Poyer leads schemed for years to manufacture it.
With a history and leadership like this, is it any surprise the community is plagued by problems?
Moriarty was also retained by the old Friends of the Summit group. There was a feeling by some that he took an extremely long time to obtain favorable judgements on some highly winnable cases. Took years just to get the old Sims board to render accurate financial statements. Cost a lot of lawyer bucks too. Still, we are surprised that he sent this memo and disappointed such a scheme was even considered by anybody legally and morally obligated to represent the best interests of LHCC members.
Steve Moriarty says
After representing the interests of the members of Lake Holiday for over a dozen years, I am disappointed (but not altogether surprised) at the mischaracterization of my July, 2000, memo. A plain reading of paragraphs 3 and 5 indicate that I specifically advised the board against doing anything that superceded its power or, specifically, constituted fraud.
Second, I am curious as to what ‘winnable’ cases you mean. When this firm represented LHCC we never lost a trial in Circuit Court. If you refer to the removal of Simms’ board (no one was ever able to get legitimate and complete financial information from his administration), you must not have been in Winchester during that time. Three previous firms attempted to do what we did, without success. The Receivership case was filed in February, 1998, and went to trial – successfully – in August of that year. It had been set for trial in May, but Simms successfully pleaded for a continuance or we’d have finished it in 3 months.
Oh, and the legal fees were awarded by the Court.
Dale Orrison says
Speaking of shabby treatmeant, today I recieved a registered letter from Lake Holiday informing me that I was being citated for running a stop sign, gave the date time and tag #. What it didn’t include was my signature that this really occured.
I will be the first to admit that I don’t really stop for any of the signs they have put up because they are pointless. The interesting thing is the date and time the officer citated was the same time and date the vehicle was sitting on a Merck company employee parking lot a hundred miles away.
I wonder if there is any direct connection between the powers that be having spent themselves into a financial mess and the dicovery of a new revenue source.
So to all, be careful the depths to which these people will stoop is beyond compare. And they wonder why no one wants to live here. Been here twenty years and if this isn’t getting close to rock bottom it’s gotta be close.
Cheryl Humphreys says
what I just read keeps me from wanting to purchase land as a non member or member. What a rediculous situation!