Arnold Palmer's exclusive Bay Hill golf club does not live up to its billing, says a Japanese company that is backing out of a $46 million purchase agreement and suing the club owners.
A circuit court lawsuit by WDI Systems Inc. contends that club buildings are riddled by asbestos materials that can become airborne and create a cancer threat. The company also complained that club owners did not file required income tax records, making it liable to heavy fines.WDI Systems charges breach of contract and wants its $3 million deposit returned.
A lawyer for the owners said the complaints were baseless.
"The allegations are totally devoid of merit," said William Carpenter, counsel for International Management Inc., an agent in the sale and one of the defendants. "There's nothing to these complaints."
International Management, based in Cleveland, is considered the biggest sports agency in the world. It represents or has represented many big-name athletes such as professional golfers Palmer and Jack Nicklaus and former tennis star Chris Evert.
Other defendants are the agency's owner, Mark McCormack, harness-racing celebrity Delvin Miller and former owner Carl Tippit of the Cleveland Indians baseball team. All are Orlando residents part of the year.
Palmer owns 47 percent of the club, which is the site of an annual professional golf tournament. Club officials said Palmer was out of town and unavailable for comment.
WDI agreed to purchase the club in February. It paid the $3 million deposit and gained access to the club and its records.
The company said the asbestos in the club restaurant, lounge, lodge and bathhouse is friable, meaning it can crumble and become airborne.
"We're going to remove it," Carpenter said of the construction material, which he said is not friable. He said the Japanese knew that but sued anyway.
WDI's suit filed in Orange County Circuit Court in Orlando said club owners did not file Internal Revenue Service tax forms showing payments to contractors and other non-employees. In a letter to the club owners last month, the Japanese company said the failure to file could mean penalties of $100,000 or more for the club.
The letter also said the club's tax deductions and other transactions might be "deemed unreasonable" by an IRS audit.
Carpenter said accountants regularly go over the club books and have seen no problems.
"They file all of their tax returns," he said.