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Royal Links USA

Below, you will find updates, in chronological order, of the status of the class action lawsuit filed by golf course operators against Royal Links USA

Update January 19, 2011

Dept. of Justice Indictment of Philip Cargnino
Victim Notification System 

The US Department of Justice (DOJ) filed an indictment in the US District Court for the Northern District of Ohio against Philip Cargnino, an owner of Royal Links, on January 5, 2011. Cargnino was charged with conspiracy to commit mail fraud and wire fraud in connection with a scheme by RLUSA to defraud golf courses and leasing companies throughout the United States.

The defendant is currently awaiting arraignment before Magistrate Judge Knepp in Toledo. At the arraignment, Cargnino will be asked to enter a plea of guilty, not guilty, or as otherwise permitted by law. Depending on the jurisdiction, arraignment may also be the proceeding at which the court determines whether to set bail for the defendant or release the defendant on his or her own recognizance. It is expected that Cargnino will plead not guilty at his arraignment hearing. However, there’s always the possibility that he could enter into a Plea Agreement prior to trial, or plead guilty without one.

The U.S. Attorneys Office plans to send one more physical mailing to the victims once the arraignment date is set to inform them of this filing.  The rest of the notices will be sent out via e-mail though the office’s automated Victim Notification System (VNS). The NGCOA strongly encourages victims to contact the VNS Call Center, or go to the VNS website referenced in their letters to provide a current e-mail address so they receive subsequent communications.

The case will be heard by US District Judge Jack Zouhary, the same judge who is handling the DOJ’s case against Sandwisch and Flaum. These cases are on independent, yet parallel paths.


Update July 8, 2010

Victim Impact Statement 

The US District Court for the Northern District of Ohio has postponed the August 23 sentencing hearing for the defendants in the Royal Links Case. The judge has not set a new date for the hearing.

This delay gives golf course owners who had contracts with Royal Links additional time to complete the Victim Impact Statement and provide it to the court. These statements will be considered by the judge in the sentencing process. In addition to possible restitution to victims, we understand the maximum penalty is five years imprisonment.

Please download the Victim Impact Statement and return it via fax to:

Terri Greene
Victim/Witness Coordinator
US Attorney’s Office, Northern Ohio
Fax: 216-685-2378


Update June 9, 2010

Dept. of Justice Indictment
Dept. of Justice Press Release

The US Department of Justice (DOJ) filed an indictment in the US District Court for the Northern District of Ohio against Robin Flaum, Royal Links president, and Daniel Sandwisch, Royal Links co-owner, on March 31, 2010. Both Flaum and Sandwisch were charged with conspiracy to commit mail fraud and wire fraud in connection with a scheme by RLUSA to defraud golf courses and leasing companies throughout the United States.

On May 13, 2010 defendants Flaum and Daniel Sandwisch pled guilty to the charge of “conspiracy to commit offense or to defraud.”  As a result, there will be no trial involving the defendants.

The judge has ordered the Probation Department to prepare a pre-sentence investigation report prior to sentencing. This report includes sections on victim impact and restitution. Owners who have received communication directly from the DOJ are encouraged to complete the Victim Impact Statement. Please understand the DOJ cannot guarantee restitution will be awarded at sentencing. Also, if restitution is ordered, the DOJ cannot guarantee that the defendants will pay it. Yet, completing this documentation is a vital step in ensuring the true story is told in court.

Affected owners who have not heard from the DOJ regarding this case and wish to complete the Victim Impact Statement, please contact the US District Court for the Northern District of Ohio at 800-353-8232. Please reference Case Number 2004R01305 and Court Docket Number 10-CR-00134.

The sentencing hearing is scheduled for August 23rd.  In addition to possible restitution to victims, we understand the maximum penalty is five years imprisonment.

Obviously, we wish the prospect of financial restitution was more significant. However, it is always the wisest course of action to pursue any relief possible in these situations. We hope owners elect to complete the Victim Impact Statement.


Update December 3, 2007

After more than three years of activity, the NGCOA has ended pursuit of the recovery of funds from the Royal Links bankruptcy estate.  More than 70% of the responding contributors to the Legal Fund gave us this direction. Presently, the estate has a little more than $4,000, making the chances of any significant recovery very slim.

The remaining balance in the Legal Fund will be returned to contributors in December on a pro rata basis.

Back in the Fall of 2004, we reacted quickly to our members concerns when Royal Links notified them that it planned to cease making monthly payments to all customers.  We were the only industry association that got involved. Here are just some of the highlights of our legal campaign:

  • Task Force established and under their direction, coordinated development of a Legal Fund and hired Lord, Bissell & Brook, LLP (LBB) as representation.
  • LBB filed a class-action complaint against Royal Links USA, Inc. in the U.S. District Court for the Northern District of Ohio on April 1, 2005.
  • National publicity was generated by the filing.
  • On Friday, August 19, 2005, Royal Links USA filed a Voluntary Petition for Chapter 7 Bankruptcy with the United States Bankruptcy court for the Northern District of Ohio. Because of the filing of the Petition, the lawsuit against Royal Links USA was stayed.
  • A number of leasing firms agreed to settle with owners.

Obviously, we wish the results were more significant. However, it is always the wisest course of action to organize and pursue relief in these situations. We did that, together.

Update June 12, 2007

The week of May 27th, the NGCOA began polling the contributors to the Royal Links litigation fund as to their desire to continue litigation.
We are now collecting those responses and will present the next update in early July.

Update May 25, 2007

First of all, we want to thank everyone for his/her patience in this process.

This is where things currently stand. The federal lawsuit filed against Royal Links USA in the Northern District of Ohio in early 2005 has been stayed as a result of Royal Links' bankruptcy filing later that year.  The bankruptcy proceedings have been slow to proceed.  Lord, Bissell & Brook assisted course owners with completing proof of claim forms (POCs) in February and March 2006, but the bankruptcy has been slowed by the resignation of two different trustees.  The latest trustee, Patricia Kovacs, had the case converted from a no asset Chapter 7 bankruptcy to an asset Chapter 7.  The trustee has been slow to respond to inquiries concerning the status of the bankruptcy proceeding.  However, in mid-May, Lord, Bissell & Brook received a message from the trustee's office and learned that at this point the assets in the Royal Links bankruptcy estate total a little over $4,000.  Therefore, it appears that the chances of recovery from the bankrutpcy estate are slim. 
 
Lord, Bissell & Brook is not aware of any progress in the investigation that the FBI started in 2005.  In fact, recently the firm heard from a number of course owners that the FBI is now referring inquiries to the Lord, Bissell & Brook office, which may signal that the FBI is no longer investigating Royal Links.
 
With respect to the leasing companies who hold the leases on the beverage caddies, Lord, Bissell & Brook is not aware of any additional settlements that have occurred since last October.  A number of leasing companies have been willing to negotiate settlements, but the terms have varied widely.
 
At this point, there is still some litigation funds that Lord, Bissell & Brook is holding in trust for the NGCOA members who are class action plaintiffs.  We believe the timing is appropriate to poll that group to understand if they wish to continue with litigation or if they would like to start winding down these activities. If they choose to end the litigation process, the remaining litigation funds will be returned to those members on a pro rata basis.

NGCOA members who contributed to the legal defense fund will be contacted the week of May 27th and asked to vote Yes or No to continuing litigation.

Update November 6, 2006

On the settlement front, the week before last IFC agreed to settle another case.  The case would have settled for close to 60 cents on the dollar were it not for course owner communicating a conflict (and, unfortunately, higher) settlement offer to IFC's local lawyer.  In the end, the settlement was close to 75 cents on the dollar.

With respect to one of the brighter spots of late, word of a Michigan court's favorable decision against C&J Leasing should be communicated to all course owners, but particularly any course owners in Michigan.  The court refused to apply the forum selection clause (something that has not worked in a number of states) and allowed the course to avoid its obligations under the lease based on a fraudulent inducement theory.  Any courses in Michigan should consider this approach – Below area copies of the relevant legal filings.  Moreover, any courses that received a letter similar to the letter dated August 12, 2003 that is attached to the Complaint should let Lord, Bissell and Brook know as soon as possible.  Such a letter may allow courses in other jurisdictions to attempt a similar claim.

Any inquiries should be directed to Andrew Gifford at Lord, Bissell and Brook.

Andrew R. Gifford
LORD, BISSELL & BROOK LLP
111 South Wacker Drive
Chicago, IL 60606
Tel. 312.443.1733
Fax 312.896.6733
agifford@lordbissell.com

Complaint Document
Plaintiff Response to Defendant Brief in Support of Motion to Dismiss
Defendant Rply Brief in Support Motion to Dismiss
Defendant Motion for Dismissal


August 15, 2006

The FBI has apparently sent communications to as many course owners/operators for whom they have information as victims of Royal Links.  We have received word from several course owners that the FBI sent letters with instructions on how to keep informed about the ongoing and open case.  Unfortunately, it appears there was a serious problem with their database of courses, as many course owners are getting letters for the wrong people at the wrong courses.  We are attempting to contact the FBI about this matter and offer our database of Royal Links customers.  In the meantime, if you received an incorrectly-addressed letter please do not use the log-in information provided in the letter.  We hope to secure a commitment from the FBI to generate a newer, accurate mailing.




August 2, 2006

Update from Lord, Bissell and Brook:

The Royal Links bankruptcy proceedings are moving slowly.  The initial trustee, Louis Yoppolo, withdrew earlier this year.  An interim trustee was appointed for a brief period, but did little work.  Now, new trustee Patricia Kovacs has taken over the supervision of the bankruptcy proceedings.  Attempts to reach Ms. Kovacs regarding the status of the claim process have been unsuccessful.  In addition, Royal Links class action counsel Lord, Bissell & Brook also waits to hear from Ms. Kovacs regarding whether she intends to initiate any proceedings concerning the misrepresentations made to course owners to induce their participation in the beverage caddy program.




Update: February 15, 2006

By now, many of you may have received a notice to file a Proof of Claim (POC) in the Royal Links bankruptcy case.  You have received the POC because Royal Links has identified you as a potential creditor.  Lord, Bissell & Brook recommends that all of you submit the POC form on behalf of your course as soon as possible, but no later than May 4, 2006.  Here are some general things to keep in mind when filling out the form:

1.  Submit the POC to the United States Bankruptcy Court for the Northern District of Ohio, 1716 Spielbusch Ave., Toledo, OH 43624.

2.  The POC should be submitted on behalf of the entity or person that entered into the beverage caddy agreement with Royal Links.

3.  In box 1, you will want to check the box "Other" and write in "Failure to make payments per written agreement"

4.  In box 2, you will want to include the date of the letter you received from Royal Links (for most people this will be October 2004) advising you that they would no longer make payments under the beverage caddy agreement.

5.  Box 3 can be left blank.

6.  In Box 4, "Unsecured Nonpriority Claim" should be checked and the dollar amount should equal the total number of monthly payments that Royal Links never paid to your course under the beverage caddy agreement.

7.  The same amount from Box 4 should be filled in in Box 5 where it says "(unsecured)".

8.  Per the instructions in Box 7, you should attach a copy of the beverage caddy agreement you entered into with Royal Links to the POC.

9.  Per Box 8, include an extra copy of the signed and dated POC and attachments, along with a self-addressed, stamped envelope, so that you will receive confirmation of the filing from the court.

10.  Sign and date the POC at the bottom where indicated.

It is best to send in your POCs as soon as possible, but again no later than the beginning of May.  If the court receives a claim after May 4th, the claim will likely be barred.


 

Update: November 1, 2005

The first meeting of creditors in the Royal Links bankruptcy proceedings took place on October 12th.  We are 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.  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.  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.

The NGCOA Royal Links Task Force is scheduled to meet tomorrow at the offices of Lord, Bissell & Brook LLP.  The purpose of the meeting is to ensure all resources are being deployed in the most effective way possible, and to discuss ways to leverage the settlement possibilities between courses and leasing companies.

Any questions should be directed to lead attorney, Andrew Gifford, at AGifford@lordbissell.com.



Update: August 31, 2005

On Friday August 19, 2005, Royal Links USA filed a Voluntary Petition for Chapter 7 Bankruptcy with the United States Bankruptcy Court for the Northern District of Ohio.  Because of the filing of the Petition, and in accordance with Section 362 of the Bankruptcy Code, the lawsuit against Royal Links USA in the United States District Court for the Northern District of Ohio has been stayed.  In short, following the filing of the Petition, it is not possible to take any further action against Royal Links in our current lawsuit until the stay is lifted.  However, there is a possibility of taking legal action against entities and individuals related to Royal Links in the Bankruptcy Court proceedings.  Lord, Bissell & Brook LLP is currently evaluating the possibility of taking such action in the Bankruptcy Court case, particularly with respect to funds that may have been transferred from Royal Links to other entities or individuals.
 
With respect to the leasing companies, LB&B previously served subpoenas requesting the production of documents relating to the various leasing companies' relationship with Royal Links.  However, the filing of Royal Links's Bankruptcy Petition prevents the enforcement of these subpoenas at this time.  Lord, Bissell & Brook will, therefore, initiate another round of communications with the leasing companies in hopes of furthering the possibilities of reaching settlements on the lease obligations.

Class members should be aware of the ramifications of ceasing lease payments; such action is still precipitating lawsuits against these courses.  Some lease companies appear to be unwilling to settle, while others have settled in court.  One example is with Junction City Country Club (Junction City, KS) and Landmark Financial.  Junction City was responsible for a $7,700 balance under their lease obligation and settled with Landmark for $3,800, although legal fees and other costs added up to more than the savings of the settlement.  The attorney who represented Junction City is Ryan Williams, and he can be reached at 303-623-1800.  Harold Johnson with Junction City Country Club can be reached at 785-238-1161.

Fill out the form below to make a contribution


 

Update: July 8, 2005

On Friday July 8th, Lord, Bissell & Brook LLP served interrogatories and document requests on Royal Links USA.  By rule, Royal Links has 30 days to respond to these.  This is the first written discovery served in the Royal Links Litigation.  LBB will also be sending out subpoenas to the various leasing companies during the coming week.  Service of subpoenas on the leasing companies will hopefully trigger responses from the leasing companies with respect to possible settlement discussions.

For more information:

Andrew R. Gifford
LORD, BISSELL & BROOK LLP
115 South LaSalle Street
Chicago, Illinois 60603
Direct Telephone  312.443.1733
Direct Facsimile 312.896.6733
email: agifford@lordbissell.com


 

June 23, 2005

Royal Links Litigation:  On June 1st Judge Katz of the Northern District of Ohio held a status hearing with all of the lawyers involved in the class action litigation involving Royal Links.  Judge Katz granted a motion to consolidate both class action suits before him for pretrial purposes.  Judge Katz indicated that he will revisit the issue of whether the cases should be consolidated for trial after the completion of discovery in the case.  Royal Links filed its answer and defenses to the complaint on June 10th.  A copy of the answer is attached.  Royal Links did not move to dismiss any of the allegations, but instead asserted in its answers and defenses that because the beverage caddy program was really an advertising revenue sharing program, there had to be sufficient advertising revenue to distribute to the participating course owners and operators.  Lord, Bissell & Brook LLP (LBB) is currently evaluating the merits of this defense.  The parties have recently exchanged initial disclosures of relevant witnesses and documents.  Written discovery, including document requests, should be issued shortly by the parties.

Negotiations with Leasing Companies:  It appears that LBB has now received responses from most participating courses regarding possible negotiations with the leasing companies.  The majority of respondents favored entering into settlement discussions with the leasing companies.  To the extent you have not yet contacted LBB regarding negotiations with the leasing companies, please contact attorney Andrew R. Gifford (agifford@lordbissell.com) at your earliest convenience.  LBB is preparing correspondence to the leasing companies that will propose a settlement along the lines of what it raised in its letter of May 19th to the class.  LBB will provide an update once it receives responses from the leasing companies.

In the News:  The dispute with Royal Links has started to receive attention in the news.  Two recent articles are below.
--------------------------------------------------------------------------------

SPRINGFIELD TOWNSHIP FIRM IS DEFENDANT

Lawsuit accuses area company of reneging on payment pledge
By MARY-BETH McLAUGHLIN
BLADE BUSINESS WRITER

A suburban Toledo firm has been sued in federal court on the behalf of hundreds of angry golf course operators nationwide who allege it reneged on a promise to pay monthly reimbursements if they agreed to lease refreshment carts that carried advertising.


Royal Links USA Inc., in Springfield Township, made deals with golf course operators across the country from Jan. 1, 2002, through the end of last year to provide beverage caddies from third-party leasing companies, usually for a 60-month term, according to the suit in U.S. District Court in Toledo.

Under the arrangement, the golf course operators could sell beverages and keep the proceeds and would allow Royal Links to display advertising panels from the national sponsors on the carts. Royal Links also was to reimburse the course operators monthly for the lease costs.

The carts, however, were being provided by a third party, and when the local firm told the golf operators in October that it no longer would pay the reimbursements, the operators were still responsible for the cart leases, the lawsuit states.

Some operators said they were unaware the carts were being provided by another party and would not have signed the deal had they known the lease and the reimbursement weren't linked.

Jeff Christensen, president of SGM Inc., which runs a golf course in Twain Harte, Calif., is on the hook for $2,440 a month for eight beverage caddies. SGM is the lead plaintiff in one of two lawsuits that were combined this month.

Attorneys are seeking to have the lawsuit declared as a class action.

Ken Pester, owner of Pike Run Golf Course near Ottawa, Ohio, is paying $306.66 a month for the one cart he agreed to lease. "I feel like I was cheated," he said. "Anytime you enter into an agreement and it's not the way you thought it would be, you don't feel good about it."

The lawsuit, which has been set for trial June 13, 2006, before Judge David Katz, alleges "breach of contract, breach of the implied covenant of good faith and fair dealing, and fraudulent inducement of contract."

Royal Links officials and their attorneys did not respond to repeated efforts to contact them.

Word of the problems surfaced late last year, when golf course operators began filing complaints with the Better Business Bureau of Northwestern Ohio and Southeastern Michigan.

A Royal Links official told The Blade last fall that the firm was aware of two or three complaints, had responded to the BBB, and was trying to resolve the issues.

The litigation was filed this spring.

Mr. Pester's sentiments were echoed by counterparts on Internet message boards, so the National Association of Golf Course Operators has begun providing updates and information on its Web site about the controversy, said a spokesman.

"Royal Links seems to have targeted more modest facilities with small budgets, out in the middle of nowhere, many of which can't afford $12,000 to $15,000 for large refrigerated beverage carts," said Jay Karen, the group's spokesman.

He estimated that up to 1,200 golf courses may be involved.

Andrew Gifford, an attorney with Lord, Bissell & Brook in Chicago who is representing the operators, said, "We hope to get full restitution for all of the course owners and operators nationwide who got lured into this scheme for use of the beverage carts."

Contact Mary-Beth McLaughlin at mmclaughlin@theblade.com or 419-724-6199.
--------------------------------------------------------------------------------

City takes part in golf course lawsuit
By GWEN TIETGEN
gtietgen@gctelegram.com
Posted on Monday, June 13, 2005 1:45:01 PM

The city of Garden City is one of more than 1,000 plaintiffs involved in a class action lawsuit seeking several million dollars from an Ohio-based corporation that provides golf course programs and services.

The lawsuit alleges that Royal Links USA Inc. coerced golf courses, including Buffalo Dunes Golf Course, into buying beverage caddies after it promised to reimburse golf courses for the about $18,000 caddies. The lawsuit includes more than $26,000 allegedly owed to Buffalo Dunes Golf Course.

The lawsuit alleges a breach of contract between Royal Links and the golf courses, said Andrew Gifford, an attorney with the Chicago law firm handling the case. The class action suit has yet to be certified, Gifford said, so the exact amount of the suit is unknown at this time. The Lord, Bissell & Brook law firm in Chicago is handling the case.

"It's largely contingent on finding each course," Gifford said.

Royal Links, a Holland, Ohio-based corporation, between January 2002 and December 2004 told golf course owners that if they purchased beverage caddies from a third party leasing company, it would effectively pay for them, according to court documents. The money would come through Royal Links paying for advertising on the caddy's advertising panels. The ads would be from various national sponsors. The caddies are used to serve beverages on the golf course and can be dragged behind a golf cart, or sit stationary.

Royal Links USA Inc. is an innovator in on-course hospitality programs and services, according to Royal Link's Web site.

A few months ago, Royal Links sent a letter to Buffalo Dunes and other golf courses, saying it was terminating the reimbursement agreement, said City Attorney Randy Grisell. Since the lease was with a third party, the city is still responsible for paying the remaining $26,275, he said.

The city became responsible for financing the golf course's two caddies when it took over ownership of golf carts and other golf course property formerly belonging to Paul Parker. Parker, former golf professional at Buffalo Dunes, entered into an agreement with Royal Links in June 2003. A signed agreement between the city and Parker states that Parker is liable for paying the remainder of the lease should Royal Links not fulfill its reimbursement plan. The city took over Parker's property at the golf course in November 2003.

The city sued Parker, who now resides in Prescott, Ariz., for the remaining amount and received a judgment against him in April for $26,275, Grisell said. The city wouldn't pursue the judgment against Parker if Royal Links reimbursed the city, Grisell said.

Meanwhile, the city continues to pay about $612 a month for the caddies. The lease ends in 2008.

Golf courses also may take legal action against the leasing companies, Grisell said. Some of the allegations purport a relationship between the lease companies and Royal Links that resulted in golf courses being induced into entering the beverage caddy program, he said. The city's lease is with Landmark Financial Corp. in Denver.

One of the claims in the lawsuit says golf courses were induced to pay exuberant amounts for beverage caddies, Grisell said. The price of the two caddies Garden City purchased was $36,771.

The city already has contributed $1,000 toward attorney fees and expenses thus far.

Tim Schiffelbein, the city's golf professional, said the beverage caddies are popular and can carry more beverages and snacks than the city's beverage cart. Golfers usually can see the caddies during merchant's leagues or during tournaments, he said


April 8, 2005 Update

 A class action complaint was filed against Royal Links USA, Inc. ("Royal Links") in the United States District Court for the Northern District of Ohio on April 1, 2005.  The complaint alleges, among other things, that Royal Links breached the terms of its beverage caddie program agreements with hundreds of golf course owners and operators across the United States.  It is expected that Royal Links will be served with the complaint soon.  Discovery and further investigation will commence in the coming weeks and we will provide you with updates concerning the status of the case. 

 Some of the leasing companies involved in the beverage caddie transactions have responded to correspondence sent on behalf of course owners and operators.  Legal counsel is currently reviewing these responses and evaluating what further action should be taken with respect to the leasing companies. 

 To read the class action complaint, click here(30 MB download)

 

Update: March 18, 2005

Last week, Lord, Bissell and Brook sent certified letters to all leasing companies which participated in the Royal Links beverage caddy program.  These communications accuse the leasing companies of conspiracy to defraud participating golf course owners, demand the leases be cancelled immediately and all remaining lease payments be forgiven.  Copies of the letters are below.

C&J Leasing.pdf
CFC Investment.pdf
Dollar Bank Leasing.pdf
Excel Financial.pdf
Frontier Leasing.pdf
IFC Credit.pdf
Key Equipment.pdf
Landmark Financial.pdf
Pawnee Leasing.pdf
Preferred Capital.pdf
Susquehanna Patriot.pdf

In addition, the law firm previously recommended by the PGA of America, the Coates Law Firm, has decided not to pursue the Royal Links matter.  They have returned any documents submitted to them, as well as legal fund contributions sent directly to them by PGA members.  Their communication to interested parties is below.

Letter to Prospective Class

We will update course operators as soon as possible with ongoing news regarding the complaint being filed against Royal Links.


 

Latest Update:February 18, 2005
Contact: Jay Karen - Director of Membership
Phone: 843-881-9956 ext. 211
jkaren@ngcoa.org

Click here for a list of task force members
Fill out the form below to make a contribution
If you have yet to fill out the Royal Links survey, please click here to download the form

Last week, Andrew Gifford of Lord, Bissell & Brook LLP (LB&B) addressed a group of golf course owners at the NGCOA Solutions Summit.  Mr. Gifford outlined options for legal action against Royal Links USA and the various leasing companies.  Royal Links will likely be named as a defendant in the lawsuit.  A lead plaintiff has been identified.  LB&B is currently evaluating possible action against the leasing companies.

With respect to those course operators who have received offers for new lease agreements from leasing companies, Gifford discussed the fact that companies signing a new agreement may result in a waiver of potential recourse against the leasing companies.

NGCOA has learned that some course operators that have ceased making lease payments have been named in lawsuits initiated by leasing companies.  For many course operators, the costs involved in hiring attorneys to defend against claims by leasing companies, as well as seeking the ability to get back into a regular payment schedule after months of nonpayment, are adding up into the thousands of dollars.  In the interest of avoiding such costs, Gifford said that course operators can continue making lease payments in the short term to avoid legal action by leasing companies.  Many course operators, however, are making lease payments under protest.  When making payments under protest, be sure to include appropriate language, such as "I/we submit the enclosed payment for ____________ under protest and without releasing or waiving any legal rights."  Run this language by your own attorney before submitting it with payment.

NGCOA and various local chapters are looking into the possibility of new advertising programs to displace the revenue Royal Links had promised.  Possibilities include national advertising, state-level advertising or educating course owners on how to get local advertising.

The lead plaintiff is requesting your financial assistance by making a contribution to the legal fund.  Litigation may end up costing hundreds of thousands.  If each course gave $500, all costs could be covered.  Over fifty courses have made contributions thus far, but much more is needed.  If you have one beverage caddy, please consider giving a minimum of $500.  If you have more than one, please consider giving more.  Efforts are being made to consolidate any other legal fund efforts being promoted to Royal Links customers.  Until such consolidation happens, the lead plaintiff is seeking your assistance now to ensure a successful launch.  Fill out the form below to make a contribution.

Attorney contact information:
Andrew R. Gifford
LORD, BISSELL & BROOK LLP
115 South LaSalle Street
Chicago, IL  60603
Telephone 312. 443.1733
Facsimile 312.896.6733


Fill out the form below to make a contribution
If you have yet to fill out the Royal Links survey, please click here to download the form

Update: February 1, 2005

Golf Course Owners Set To Begin Class Action Against Royal Links USA

Charleston, SC -- Golf course owners throughout the United States plan to file a lawsuit this month against Royal Links USA. Royal Links USA entered into written agreements with over one thousand golf courses throughout the United States, in which golf courses would use Royal Links’ beverage caddies to display and sell food and beverage items on the golf course. This “no cost beverage caddy” program involved golf courses leasing the caddies from third-party leasing companies, and Royal Links USA agreeing to reimburse the golf courses for their lease obligations. Royal Links USA proposed to make their revenue from advertising display panels on the beverage caddies.

In October 2004, Royal Links USA notified golf courses across the country that it planned to cease making monthly reimbursement payments to all customers. Each golf course has a written agreement with Royal Links USA, which obligates Royal Links to pay courses approximately $300 per caddy per month, an equivalent amount to the lease obligations. Most lease obligations are for sixty months, and most golf courses have seen less than one year’s worth of reimbursements from Royal Links USA, thus leaving an obligation to pay four more years of lease payments. In some cases, golf courses were sold on the program within days of the written correspondence from Royal Links USA.

The Chicago-based laws firm of Lord, Bissell & Brook LLP has assisted in the investigation of Royal Links USA and will assist course owners in their efforts to obtain recovery from Royal Links USA. A task force of members of the National Golf Course Owners Association has been meeting since October 2004 to discuss the situation. Through the efforts of this task force and NGCOA, nearly two hundred golf courses responded to a request for information on their agreements with Royal Links USA and the fourteen different leasing companies that contracted with golf courses. Additional factual investigation concerning the role of the leasing companies continues at this time.

Representatives from Lord, Bissell and Brook will be on hand for a special meeting during the NGCOA Solutions Summit on February 10th at 3:15 p.m. at the Rosen Plaza in Orlando, Florida. If you have not registered for the Solutions Summit and want to attend this meeting, please contact Cristin Kennedy at 800-933-4262, ext. 212, 843-412-0988 (mobile) or ckennedy@ngcoa.org. You may register for the full conference at www.ngcoa.org.

In order to file and execute a successful class action suit, the plaintiff is requesting any Royal Links USA customers to contribute to the Royal Links USA Legal Fund. NGCOA is acting as custodian of the funds and will return any unused funds back to contributors in a pro-rata share. The plaintiff is asking for minimum contributions of $500. If courses have multiple beverage caddies, the request is to contribute a higher amount. All contributions can be sent to NGCOA at 291 Seven Farms Drive, 2nd Floor, Charleston, SC 29492. Please write “Legal Fund” on the memo line if sending a check. Those interested in paying by credit card can go to www.ngcoa.org, where you will find more information on the Royal Links USA matter.

With more than 6,000 member courses worldwide and an audience of more than 18,000 through Golf Business magazine, NGCOA is the leading resource for golf course owners and operators looking for tools to assist them in making their businesses more profitable and successful, while promoting a high level of service to partners, customers and members. For more information, visit www.ngcoa.org.



Please be advised that NGCOA had no knowledge of the Royal Links USA agreements and the security/leasing agreements. No one asked NGCOA to review these agreements prior to signing them. NGCOA did not endorse Royal Links or this beverage caddy program. NGCOA's role in this matter is to respond to members' request to organize and secure a law firm to help our members in a very difficult legal situation.
Pass this to any of your peers who may be Royal Links USA customers.
 

 


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