At 1:30 the Mississippi Supreme Court will hear the case of Dennis Kilpatrick v. White Hall on MS River, LLC wherein Kilpatrick claims a hunt club denied him membership even though he paid some $189,000 towards membership.
In 2007, five men got together and formed White Hall which purchased 2,300 acres in Claiborne County for a recreational hunting club. The price for the property was $4,858,910.00. The idea was to raise $2,000,000.00, through the solicitation of memberships in the Company with the remaining balance through a loan from the seller, Sustainable Forests, L.L.C. Each member of the Company being responsible for his respective share of the quarterly principal and interest on the Note to Sustainable.
In 2010, White Hall claimed that Kilpatrick was not a member amd prevented him from using the property. Kilpatrick made a demand upon White Hall to review financial records pursuant to Miss. Code Ann. § 79-29-107 but was refused. Kilptarick made payments totaling $189,000 but White Hall claims $500,000.00 is the amount to acquire a membership interest in the Company. White Hall, though, has no written agreement specifying the amount required for membership. Kilpatrick sued.
White Hall contends:
If the purchase was consummated before the end of the year 2007, the purchasers would receive a substantial discount on the per acre price. Consequently, time was of the essence in this transaction. Only three of the individuals made the full $500,000.00 contribution towards the purchase price and were made members. Dennis Kilpatrick told the others a week before the closing that he could only contribute $100,000.00 and promised to pay the remainder after the new year. Murray Moran paid $100,000.00 and was loaned $300,000.00 by a member for a total contribution of $400,000.00. As a result of the failure of Kilpatrick and Moran to contribute their full $500,000.00, additional funds had to be expended to International Paper to modify the note and deeds of trust on the property. When consummated, White Hall paid $2,000,000.00 toward the 7 purchase price and had a 3 year balloon note for $2,858,910.00. The terms of the loan were to pay quarterly interest payments at almost $70,000.00 until the balloon note was due. Despite making numerous promises for future payment of his remaining contribution, Kilpatrick never paid his remaining contribution. He did pay some interest payments on the note which totaled $84,500 for the following year but never contributed any more toward the contribution he agreed to pay.
White Hall’s brief.
Kilpatrick’s rebuttal brief.
Watch the argument here.