Two months after losing a $500,000 judgment in a five-year long gender discrimination case, the Spokane Country Club has filed for bankruptcy protection.
The club filed for bankruptcy Thursday, claiming between $1 million and $10 million in debt, the lion's share of the debt coming from a $1.1 million claim for fees and costs to attorney Mary Schulz for representation of four plaintiffs in a five-year legal battle against the club.
Schulz was listed among the top 20 creditors the club owes money and is the only creditor whose claim is listed as disputed.
In March a jury has ruled in favor of four women in a gender discrimination case. The plaintiffs in the case claimed the club denied them full benefits because of their gender. The Spokane Country Club lost the case and the court awarded the plaintiffs more than $500,000.
The women had originally sued the club for $4.5 million.
The timing of the filing is raising a eyebrows as a court hearing was scheduled Friday where a judge was supposed to order the club to pay attorney fees stemming from the lawsuit. A judge was also supposed to outline cultural changes the club needs to make since it lost that suit.
Because of the bankruptcy filing all that has now been put on hold.
On Friday, KXLY received a copy of the following memos Spokane Country Club General Manager Les Blakley sent out to the country club's staff regarding the bankruptcy filing:
Dear SCC Staff,
Below is a communication that went out to our membership today. SCC has filed a petition for relief under Chapter 11 of the Bankruptcy Code. As scary as this may sound I can assure you this action was done to protect the present and future of Spokane Country Club and was not done without due diligence and careful consideration in all areas by the Board of Trustees. Our operations will continue as usual and without major interruption.
No doubt you will be asked questions by the membership. Please direct a department head, myself or a board member to answer any specific questions.
The best reaction on our part is continue to provide our members with a smile, outstanding service and the professionalism of a first class club. We are off to a very busy spring and I want you all to know how proud I am of your commitment and passion you have shown towards SCC.
Les Blakley, General Manager
KXLY also received a second letter on the filing, this one sent to the club membership Friday.
To the Members of the Spokane Country Club:
The Spokane Country Club filed a Petition for Relief today under Chapter 11 of the Bankruptcy Code. This action was taken to allow the Club adequate time and resources to reorganize the Club to meet the needs of its current and future membership. In the following months, the Board will work to develop an acceptable plan to emerge from bankruptcy as quickly as possible.
There should be no noticeable change due to the Chapter 11 filing. The Spokane Country Club will continue its ongoing operations including events and tournaments while developing the reorganization plan that will allow the club to emerge from the reorganization as a stronger entity that will continue to serve our members for years to come.
This filing stays all state court litigation against the club. All claims against the club will be determined under the jurisdiction of the Bankruptcy Court, which may authorize additional proceedings in state court as appropriate. We do not expect the state court hearings that are set for May 10, 2013 to proceed on that date.
The club will seek to pursue the appeal of the legal issues that have been decided against the club in the pending lawsuit – including the ruling that SCC is a public accommodation, and not a private club.
The club will move quickly to develop a business and restructuring plan that will provide for the restructuring of our existing corporate structure, and provide for full payment of all liabilities as quickly as possible.
Please register with the Club office to attend one of the town hall meetings next week (Monday, Tuesday, and Thursday) at 6:00 pm to get more information.
Spokane Country Club
Board of Trustees