Royal Links Scandal Up-Date
A Golf Course General Manager originally sent us an e-mail to look into this:
“Royal Links USA had salesmen call on golf courses to offer free beverage carts. (cold beer, wine, soda's, snacks.) The courses would use them and allow advertising panels to be displayed by Royal Links. Various national merchandisers would pay Royal Links for ads. Royal Links supplied products for free with delivery, and also paid the courses a lump sum (normally $1000) to initially stock the cart with startup merchandise.
“Courses entered into an agreement whereby Royal Links paid the course about $300 per month in sponsorship money, which was then sent back to their leasing arm as a lease payment. This arrangement was simply explained as their accounting procedure.
“We became concerned initially when it was requested the cart be insured for $12,500. The cost of the cart is most likely less then $1000.
“In October 2004, all courses were notified that Royal Links would no longer pay the $300 per month in sponsorship money. Our cart had been delivered about 60 days prior to this notice. The leasing company insisted they were independent and demanded the $300 monthly payment (for 5 years). Preferred Capital quoted a payoff of approximately $15,900.”
(name with held)
Subsequently, we learned eleven leasing companies were involved in the alleged fraud with Royal Links.
Dollar Bank Leasing
The National Golf Course Owners Association sponsored its members involved to join together, which they did, and hired Bissell & Brook,LLP, out of Chicago, Illinois, who as they started ran into a bankruptcy by Royal Links.
The first meeting of creditors in the Royal Links bankruptcy proceedings took place on October 12th. The law firm is now "...waiting to receive the official report of the proceedings from the bankruptcy trustee's office. The bankruptcy trustee has not yet set a deadline for filing proofs of claim.
In the meantime, Lord, Bissell & Brook LLP has prepared a motion to be filed in the bankruptcy court that would allow discovery to proceed against Royal Links, according to the National Golf Course Owners Association. They state this is part of the continuing effort to discover any assets that Royal Links may have to satisfy claims arising out of the beverage caddy agreements.
A number of courses have started to receive communications from the Federal Bureau of Investigation as it continues its investigation of Royal Links, they noted on their web site: http://www.ngcoa.org/, adding “Courses that have not yet been contacted by the FBI should call Debra Hughes, a Victim Specialist with the Boardman, Ohio FBI office. Ms. Hughes's number is 330.965.2920.
"With respect to the leasing companies, there has been some movement lately. A couple of leasing companies (IFC Credit and Key Equipment) have expressed a willingness to resolve disputes involving the leases and in some instances have agreed to settle with courses for amounts less than the balance due under the lease. Courses with outstanding lease obligations should feel free to make independent communications with the leasing companies in an effort to pressure settlements."