A Clark County District Court judge roughly split the difference when deciding how much golf course developer Bill Walters owes on a loan that was wrapped up in the failed 2006 sale of the Stallion Mountain Country Club.
In a written ruling late Friday, Judge Mark Denton set the club's value at $10 million in December 2008, when the now-defunct Community Bank of Nevada foreclosed on it.
Setting that number is the first step in a still-lengthy process of determining who will pay the difference between the course's value then and the amount owed on a loan that made its sale possible.
Walters had personally guaranteed the loan. The balance due is calculated at $17.35 million. Depending on other legal wrangling, he would face a deficiency claim of $7.35 million owed to the bank. Lenders typically seek attorneys fees and interest, so the final amount could climb.
But in a complex, four-corner case that includes the Federal Deposit Insurance Corp., which took over the bank, Walters, the Southern Nevada Water Authority and the individual investors that bought Stallion Mountain in February 2006 for $24.5 million, it is still not clear who will pay how much or when.
In a three-day trial that started Feb. 28, the FDIC argued that the course was worth $6.8 million when it was taken by the bank. That would mean a deficiency claim of $10.55 million.
Walters, who is also embroiled in lawsuits with the dozens of individual buyers he sold the course to, argued that the course was worth far more, and that the deficiency claim should be $2.1 million.
Setting the value at $10 million puts the deficiency at about the midpoint between the two figures.
In his six-page decision, Denton weighed the opinions of two appraisers, a golf course expert, the value of the water rights and how much of a write-off Community Bank took on the loan, then arrived at his number.
As an example of the legal battles remaining, the FDIC has claimed that it should get $1.2 million the water authority paid the buyers to tear out some greens as part of a water conservation program. If the FDIC wins anything on this front, it would be subtracted from the deficiency claim.
Course manager and designer Jim Colbert, however, testified that selling the turf was a bad idea by the Stallion Mountain buyers given the relatively cheap water rates it was entitled to compared with other courses. Also, he said, replacing the grass with gravel made playing a round an unpleasant or even hazardous experience.
"I wouldn't want my name in any way, shape or form associated with this golf course," he said.
Contact reporter Tim O'Reiley at email@example.com or 702-387-5290.