A Myrtle Beach businessman and his business partner have sued International World Tour Golf Links owner Mel Graham, contending he defrauded them in their attempts to purchase the Myrtle Beach course.
Graham, a developer from Charlotte, N.C., is a nephew of evangelist Billy Graham.
Jeffrey Gohn of Myrtle Beach and Rolf Hendricksen of Durham County, N.C., allege that Graham breached a contract, acted in bad faith and committed fraud after they entered into discussions to buy World Tour, which features 27 holes modeled after famous holes around the world. They contend they’re out $500,000 that was an initial payment in the proposed purchase.
In an email to The Sun News, Graham adamantly denied the allegations and said he intends to aggressively defend himself against them.
“I believe this is nothing more than a sour grapes claim from a couple of guys who could not live up to their commitments,” stated Graham, 55, who has developed several golf courses and residential communities in the Carolinas. He owned the Valley Club at Eastport in Little River before selling it in May 2008.
“ … I have every confidence that we will prevail in court when the truth and all of the correct facts are revealed by my attorney.”
In the lawsuit filed in Horry County Circuit Court, the plaintiffs allege that when they entered into purchase discussions late last year, Graham told them that while the annual financial statements had not been completed, the course’s 2011 revenue was approximately the same as that for 2010. The plaintiffs say that they later discovered that the 2011 revenue was only 45 percent of the previous year’s.
“Had this fact not been misrepresented, the Plaintiffs would have never agreed to the Option Agreement,” the suit states.
Gohn and Hendricksen say they understood the course needed about $500,000 in improvements. In the suit, they claim they agreed to pay $500,000 with an option to buy the course for approximately $7 million. But when the plaintiffs sought financing, they were told the course’s profits would need to increase dramatically before they could qualify for a loan.
The plaintiffs agreed to begin working at the course as marketing consultants to increase business. Under the terms of a marketing agreement, they were to be paid commissions of 15 to 25 percent on all new revenue that resulted from their efforts. They say they have received no payment.
The purchase option agreement submitted to the court states that if the plaintiffs failed to complete the purchase for $7 million – of which Graham was going to finance $3.5 million – by Dec. 31, 2013 they would receive 6.71 percent membership interest in World Tour.
The plaintiffs contend Graham promised to make needed improvements, and to provide them with information they needed to build the course’s business and profitability including hotel and packager lists. But by early 2012, neither of those things had happened, they say.
The plaintiffs contend they asked Graham when capital improvements would be made to the course, and were told in March that the plan would progress if they agreed to a higher purchase price. Gohn and Hendricksen refused.
Soon afterward, they allege, Graham ejected them from their offices at the course and prohibited them from doing further work. “Graham became completely uncooperative,” the suit states.
Graham contends he has honored his agreement with the plaintiffs. His response is due to the court on Oct. 7.
“I believe these gentlemen just got in over their head,” Graham said. “They became very confused and desperate when they were unable to perform on some marketing commitments they made and realized that the golf business is a very serious and competitive business.”
“… We have a very simple agreement which I have honored to the letter. They are the ones who failed miserably at marketing and bringing the business to the table that they promised.”
The plaintiffs state in the suit that they believe Graham never intended to sell the course and just wanted the $500,000 to make necessary improvements to World Tour. The course has undergone a renovation project this summer to change greens from L93 bentgrass to Mini-Verde Bermudagrass on 18 holes.
The plaintiffs are asking that the court award damages and make Graham repay the $500,000.
Among Graham’s developments is the Club at Longview, a residential golf community in Weddington, N.C., with a course designed by Jack Nicklaus.
Graham also plans to turn 6,000 acres in Chester County into a massive mixed-use development with 8,000 homes. Plans for the project were first announced in 2006, but the economic downturn later stalled the project.
Graham owned Eastport for several years before closing the 6,200-yard layout in January 2007. He filed the course for Chapter 11 bankruptcy reorganization when it closed, but the case was dismissed in June 2007.
Graham wanted to redevelop at least part of the course, but homeowners fought him in court, claiming Graham signed an agreement to retain the course when he purchased the property. Graham sold Eastport in May 2008 to an ownership group that includes turf products store owner Frankie Vereen and members of his family.
Graham serves on the boards of two prominent Charlotte area charities – the Billy Graham Evangelistic Association and Samaritan’s Purse, an international relief agency. Both charities are headed by Billy Graham’s son, Franklin.
Contact ALAN BLONDIN at 843-626-0284.