This past week I attended the afternoon session of the three Trumpets meetings that were held on the 28th of February. The meeting, while very informative, up to a point, was no doubt a great disappointment to the several hundred residents who were in attendance. In his customary professional manner, Jack Silas presented the details of the agreement in a slide presenation along with some added commentary of his own.

The purpose of the meeting was threefold: to convey the results of two years of negotiations by our resident negotiators, Favil West and Bob Berman; to advise the Community they had but two options to consider, either accept the resulting negotiated amendments to the existing lease or to litigate against S&D Cafe V, LLC, with, we were told, little prospect of prevailing at trial and at great expense to the Association; and that the Community would decide the outcome by way of a vote to be mailed to homeowners along with the slide presentation. Whether the Board or the Community would make the final decision was less clear to this observer.

By a straw vote taken in advance of Jack's presentation, an overwhelming majority of those in attendance voted their preference to remove the current lessee of Trumpets.

Here are some highlights of what I learned:

• There was no limit to how much our resident negotiators were willing to write off and give away to the lessee of Trumpets, S & D Café V, LLC, to retain their business.
• The Association will receive not one dime, with the slate being wiped clean; this total write off of all Trumpets' indebtedness is, by the way, the second time with S&D Café V, LLC.
• It was evident that the negotiators were unable to determine how much was owed since the auditors were not able to make that determination from the information that had been provided by S&D Café V, LLC.
• Although the amount owned to the Association was estimated to be in the range of $300-400,000, it was also evident that our Sun City negotiating team had little to no interest in determining the amount owned since, after all, S&D Café V, LLC would be paying the Association absolutely nothing.
• A 50% reduction in basic monthly rent, from $10,000 to $5,000.
• Since the lessee had a potential cause of action against Pulte, Pulte has entered into a separate agreement to settle any claims. These claims were based on alleged misrepresentations concerning the number of catering contracts the lessee could expect in the future, about 135, that were made by the Developer's representative to induce the lessee into signing the lease agreement, when the actual number of catering contracts was about 35.
• Rather than continue on, David Berman has provided an excellent and rather detailed report on his two visits to hear the Trumpets presentations. To read David Berman’s Report here, Click: David's Anthem Journal
• Given the structure of David's blog, residents may readily comment on any topic. In the case of the Trumpets presentations, residents had plenty of thoughts to contribute. Rather than refer our readers to the blog to read those Comments, you may do so here. Click: Resident Comments
• Those interested in receiving email notices and updates to David's Anthem Journal, may do so by visiting David's website and by entering their email address in the box located in the left-hand column and clicking on "Get email updates." To reach David's website, click on this Link: http://anthemjournal.typepad.com

Are There Other Trumpets Options?

While the Board has outlined two options, either accept the negotiated deal or litigate, the Community may have available other options not mentioned by the Board. In giving the Community a proposed completed "deal" contrasted with an entirely unacceptable option to litigate, the Board has set the stage for the only real option being presented to the Community—to accept the completed deal.

One of those alternaitve options was presented on the Association's "Message Board" by Mike Dixon, who is also a candidate for the Board. His option is surprisingly engaging and yet is very simple to implement. Interestingly, Mike's "Option Three" can best be described as the "Do Nothing" Option. The Association's "Message Board" can be accessed clicking here: http://www.sca-hoa.org/inside_frame.asp

Here is how Mike Dixon explains his DO NOTHING Option."

The Board presented two options: Sign the proposed lease addendum or sue Trumpets and run the risk of a counter suit. Why won’t they include our best option, which is DO NOTHING?

If they DO NOTHING, we continue under the current lease until it expires on September 30, 2007. Trumpets can only renew the lease if it is not in default under the current lease. In fact, Trumpets is in default because, contrary to what you heard at the meetings, the lease clearly states that no violation of the lease by us or anyone else allows them to suspend or delay payment of any amount due and payable. Nothing, not lack of office space, not stolen food, not witholding credit card payments, not disppearing catering contracts, not church services, 'Nothing'. If Trumpets asks to renew the current and has not paid all amounts owed, our Board can simply declare them in default. Trumpets can continue operations for the remaining six months on the lease. At 12:01 am on the morning of 10/1/2007, if all amounts due aren’t paid in full, we lock the doors, they are gone, and we can collect every penny they owe us.

As you know, we carry an insurance policy on our directors, past and present. It protects us as well as them from financial liability due to their 'breach of duty', whether negligent or willful. We can file a claim for all amounts owed by Trumpets because our boards failed to enforce the lease, a breach of duty. Our governing documents require that the policy benefit be at least $2M, and it can also be used for defensive litigation and damages should Trumpets sue us and prevail. It is up to the insurance company to prove the violation was 'willful' and pursue repayment by individual board members.

Don’t be swayed by fear, uncertainty, and doubt. Ask the Board why it won’t include this as an option when it’s our best option! Tell the Board to DO NOTHING about Trumpets.

 

Ron Johnson, 6 March 2007