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Golf Course and the Clubhouse was not transferred out of escrow
to VCI.
Also because VCI had not sold the required number of
memberships, pursuant to the Contract, during the balance of
1996, 1997, 1998, and until April 21, 1999, VRI managed and
operated the Golf Course and the Clubhouse on behalf of VCI. We
refer to this period of time (namely, the period of time after
completion of the Golf Course and the Clubhouse during which VRI
continued to manage and operate the Golf Course and the
Clubhouse) as the “transition period”.
Under the Contract, during the transition period, VRI
realized the profits and losses relating to operation of the Golf
Course and the Clubhouse. The bylaws of VCI, however, limited
the amount of annual dues (as distinguished from membership fees)
that could be collected from Club members to pay for operation of
the Golf Course and the Clubhouse, and cumulative losses of
approximately $994,393 were realized by VRI during the transition
period in connection with VRI’s operation of the Golf Course and
the Clubhouse. The operational losses apparently were caused by
the fact that the member base in the Club was not yet large
enough to generate sufficient dues and other revenue to cover the
operating expenses.
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Last modified: May 25, 2011