A shareholder will appeal a Chancery Court ruling dismissing a suit against the Newark Country Club board.
The Chancery Daily reported a notice has been filed to appeal the case to the state Supreme Court.
In late August, Delaware Chancellor Andre Bouchard had earlier denied an amended complaint from Jennifer L. Stritzinger, who is seeking a receiver to oversee its operations.
She sued the board of directors after the club opted for a loan in an effort to shore up its finances.
Bouchard dismissed the amended complaint with prejudice, meaning the action cannot be refiled with Chancery.
The decision took note of the financial difficulties faced by the county club, which has reported losses and is located on a prime piece of real estate in the city.
The club consists of a golf course, clubhouse and related facilities, with much of the value of the property coming from its location in the college town.
Bouchard noted in his decision that club has been approached by developers, but had declined offers, the decision stated.
The complaint dates back to 2016, the year the company received financing from a mortgage company LLC formed by some board members, after posting posted losses of $266,252 in 2014; $242,154 in 2015; and $416,392.70 in 2016.
The LLC has three mortgages totaling approximately $1.8 million, not including the latest loan.
Stritzinger objected to the transaction and filed a complaint that was later amended.
Bouchard ruled that the board did not act in bad faith. He noted that the members who formed the mortgage LLC recused themselves from the board’s decision to go with the mortgage approach, rather than merging with another club, selling the property or signing over the development rights to the state of Delaware as a way to preserve the property.
Bouchard ’s decision made no reference to specific developers. However, in 2007, William B. Stritzinger proposed a residential development at the club. Under the plan, the club would move to a site in neighboring Cecil County, MD.
The Newark Post reported that redevelopment of the site was allowed under the law.
The plan for 270 homes came shortly before the financial crisis of 2008-2009 and no development took place. Often zonings face a 10-year deadline and can revert to a previous use.
