New Seabury Members Group Charges 'Unfair and Deceptive Acts'

MASHPEE, Mass., April 28, 2016 /PRNewswire/ -- Members of the Cape Cod community of New Seabury have charged New Seabury Properties, LLC, a subsidiary of Icahn Enterprises L.P., and the manager and owner of the facilities, with unfair and deceptive acts, violation of a bankruptcy court order, breach of contracts and coercion with respect to changes in members' statuses that members believe the company is trying to impose unilaterally.

On April 8, 2016, the New Seabury Members Rights Committee which was formed in March after New Seabury Properties surprised members with a letter outlining unilateral changes in their rights, benefits, and fees, filed a petition in U.S. Bankruptcy Court in Boston to prevent New Seabury Properties from proceeding with actions outlined in a March 17, 2016 letter.

The obligations of the owner of New Seabury, including the clubhouse, golf courses, and other property, are outlined in a 1998 Confirmation Order that concluded the bankruptcy of the former owner and manager of the 1,500-acre residential and recreational community on the southern Cape Cod coast.

"We believe that if Mr. Icahn knew about the strong-arm tactics that are being used by New Seabury Properties against its longtime members, he would be very unhappy," said Joe Pedula, a member of the Member Rights Committee.

Many members were shocked at the sudden changes, which would in some cases result in dues increases of up to 30 percent, limitations on their allowed use of New Seabury facilities, revocation of some members' rights to partial refund of initiation fees if they resign their memberships, and an increase to 900 golf club memberships, which had been capped at 690.

New Seabury Properties said it planned to replace more than 30 types of member contracts with varying provisions into six types.  To date, it has not indicated any willingness to address the members' concerns except to suggest that it would back off on its planned increase in the number of golf memberships. 

In a letter to New Seabury dated April 15, 2016, Patrick P. Dinardo of the Boston law firm Sullivan & Worcester LLP, counsel to the Members Rights Committee, said New Seabury Properties "generally informed Members that their dues would increase by 20-30% or more if they refused to join a new category." Typically, dues have risen no more than five percent a year.

Members who joined after the 1998 bankruptcy order were granted a right to a refund of part of their initiation fee if they resigned during a certain period. But those members "would be required to 'release and relinquish' that right in order to join a new category and avoid the drastic increase in fees," the letter to New Seabury Properties noted.

Further upsetting members, New Seabury Properties called a members' meeting for the Saturday before Easter Sunday with only about two weeks' notice, "knowing that a significant number of Members would not be in Massachusetts and would not be able to attend," the letter said. During that meeting, "representatives of NSP were unwilling or unable to provide meaningful information or answer questions by the Members in attendance."

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SOURCE New Seabury Members Rights Committee