CA Golfers Owed Millions Under State Settlement Agreement

CALIFORNIA — People who paid memberships to California golf clubs owned by a Texas-based company are owed millions of dollars under a settlement agreement announced Monday by state officials.

According to a 2019 complaint filed by the California Attorney General’s office, ClubCorp Holdings Inc. failed to repay more than $43 million in membership deposits owed to its more than 30,000 California members. Separately, the State Controller’s Office also sued ClubCorp in 2019.

Monday’s settlement resolves both lawsuits and will require the company to, among other things, seek out and repay members their full deposits with 10% per year interest. Additionally, the company must pay the state controller and the attorney general’s office $31.25 million in damages and penalties.

California Attorney General Rob Bonta and California State Controller Malia Cohen announced the settlement with ClubCorp Holdings Inc., an owner-operator of more than 200 private golf and country clubs nationwide.

“Today, we are holding ClubCorp to account,” Bonta said. “For decades, the company was illegally pocketing money that should have been returned to its members. ClubCorp’s own contracts confirmed as much. I’m proud of the work done by my team to secure this measure of justice for the thousands of Californians who were wronged, and I am grateful to Controller Cohen for her partnership on this matter.”

In response to a request for comment, the company released the following statement via email:

"We appreciate the engagement and collaboration of the State of California in reaching a mutually beneficial agreement with ClubCorp and their willingness to find a solution that benefits all parties, including providing certainty and predictability for our business. ClubCorp has in the past and will continue to refund initiation deposits at maturity to our members and we’re making additional efforts to reach out to depositors to notify them of the refund eligibility."

According to its website, the company currently owns clubs across the Golden State, including in Los Angeles, Orange, Riverside, San Diego, San Mateo, Santa Clara and Sonoma counties.

Under the contract terms entered into by ClubCorp members, the money they paid as deposits had to be returned after 30 years. Instead, ClubCorp only returned the money upon demand. If ClubCorp did not receive a demand for a refund, it would continue using the money for its own purposes, according to the attorney general's office.

Given that the deposits were to be refunded three decades later, more than 30,000 members did not think to demand their refunds. In addition, because the club targeted members in mid-life, many of the members to whom the club owed dues are senior citizens, the AG continued.

Under the settlement:

• ClubCorp will seek out affected California consumers and return their full deposits. In total, the company owes over $43 million. Consumers will also receive 10% interest per annum on their deposits starting from the time the deposit came due for repayment.
• If after a year-long outreach process, when the rightful owner of a deposit cannot be found, ClubCorp will deliver a percentage of the unreturned deposits to the Controller. The deposits will then be repaid in full if a consumer contacts the Controller.
• ClubCorp will pay the State Controller and the Attorney General’s Office $31.25 million in damages and penalties.
• ClubCorp will enter into a permanent injunction requiring the company to notify members as their deposits become due and make refunds. If a deposit cannot be refunded, it must be delivered to the Controller.