Hermitage Club founder accused of misrepresentation
RUTLAND — A new federal lawsuit alleges Hermitage Club founder Jim Barnes engaged in fraudulent activity by misrepresenting the health of his company before a real estate deal.
Shaun P. Golden of Suffolk County, N.Y., who founded and manages Golden Wealth Properties LLC, said he began talking with Barnes about buying five Hermitage residential real estate lots at Stags Leap around May 2017 and representations were made suggesting Hermitage Inn Real Estate Holding Company LLC was in good standing. A purchase and sale agreement for about $2.6 million was signed by both parties in June 2017, according to the lawsuit.
Single family homes were to be constructed and their owners would have "deedable admission" rights to the club, meaning they would bypass any waiting list for membership and get unlimited access to amenities. That was "the key feature and the basis of their profitability," according to the suit.
Following the closing of the agreement, the suit says, it became clear the Hermitage was "under enormous financial difficulty" with money owed for taxes, bills and contracted work.
"In an attempt to keep the Hermitage Club afloat, Barnes obtained short term financing from RCN Capital Funding LLC, a hard money lender," according to the suit.
"Barnes also imposed a $10,000 'special assessment' on Hermitage Club members, the possibility of which was never discussed with plaintiff. An additional attempt for a second 'special assessment' just a few months after the first assessment was overwhelmingly rejected and opposed by club members and the club closed for good shortly thereafter."
Berkshire Bank foreclosed the private ski resort at Haystack Mountain in February 2018 after the Hermitage defaulted on $17.1 million in loans. The Vermont Department of Taxes closed Hermitage establishments the following month for failure to pay more than $1 million in rooms, meals and sales taxes.
"With the collapse of the Hermitage Club," the suit says, "the deedable admission right became essentially worthless, destroying the value of the Golden Lots."
Golden is suing Barnes and HIREHC for fraudulent misrepresentation, fraudulent concealment, fraudulent inducement, negligent misrepresentation and unjust enrichment. The hope is to get back at least the amount paid for the properties after a trial.
The Stag's Leap development offers "luxury slopeslide houses," according to hermitageclub.com.
"Enjoy ski-in, ski-out convenience at Stag's Leap along with spectacular views of Haystack, Mount Snow and the Deerfield Valley," the website says. "Stag's Leap sits below the Clubhouse and has the convenience of a mid-station drop on the lower mountain lift."
Reach staff writer Chris Mays at email@example.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.