Wohali heads to auction later in April with plenty of lawsuits in tow.
The bankrupt golf resort in western Coalville was sued by numerous creditors trying to get their money back last year. New litigation in the runup to auction is over which resort parcels are part of the sale.
That includes 3,000 acres of disputed private backcountry it planned to offer as both a summer and winter amenity.
Boyden Farms, managed by Steve Boyden, the father of one of Wohali’s founders, claims to be its rightful owner.
His January lawsuit claims he was duped into forfeiting his rights to the land to Wohali's founding partners, including his son David Boyden.
The Utah Division of Forestry, Fire and State Lands joined the Boyden Farms lawsuit March 25, saying the backcountry is protected by a conservation easement.
The agency says the easement dates back to 2000 and involved $300,000 of federal funding from the same Forest Service program used to protect the 910 Cattle Ranch.
Forestry, Fire and State Lands says the backcountry has twice been subdivided, which the easement prohibits. So it’s suing both Boyden Farms and Wohali.
The state says that means Wohali cannot legally own the backcountry, much less sell it.
FFSL and Boyden Farms filed a joint objection to selling the backcountry at auction, which Judge Peggy Hunt overruled.
“The backcountry is currently owned by the debtor,” she said April 3. “A prospective buyer will purchase the property, including the backcountry, as is, where is, and takes the risk that the backcountry is involved in litigation.”
The bankruptcy trustee overseeing the Wohali sale acknowledges the conservation easement runs with the land.
That means it may limit what future owners can do with the backcountry, including develop it.
Three other parcels aren’t being auctioned, despite the objections of some creditors. Hunt ruled the sale can proceed without those parcels, which include a water pump and Wohali Way.
“While the trustee has been and is continuing to investigate the potential remedies with respect to the three parcels, he can only sell what he has now given the limited resources of the estate,” the judge said.
Although the sale is proceeding without that land, Wohali’s main creditor is still suing for its ownership or to get paid what they’re worth.
The creditor is a group of foreign investors who lent Wohali about $79 million through the federal EB-5 Immigrant Investor Program. The EB5 group says it’s owed that money, plus interest and more due to dragging legal proceedings.
In a March 24 lawsuit, the foreign investors allege that, when Wohali’s founders landed in financial trouble, they moved properties around to different LLCs to “hinder, delay or defraud” EB5. The founders hadn't responded in court as of April 7.
The EB5 group is still in the best position to buy the 5,000-acre resort at auction April 24.
The auction bidding deadline is April 20. Closing and a possible sale hearing is set for May.
