Ranch partners settle $80M lawsuit

By Rachael Scarborough King / The Bulletin
Published: April 06. 2007 5:00AM PST

An $80 million lawsuit between two members of a company with a minority stake in a high-end Crook County destination resort, Remington Ranch, has been settled, according to lawyers involved in the case.

The S&H Group Inc., a Washington-based corporation, filed a lawsuit late last month against Central Oregon developer Glenn Kotara and Destination Resort Group LLC for breach of contract, fraud and other complaints, according to court papers.

Kotara is the managing member of Destination Resort Group, which has a 20 percent interest in the resort, according to the suit. S&H Group owns one-third of Destination Resort Group.

Eric Dahlin, the attorney for S&H Group, said he will file papers to dismiss the lawsuit in the next few days. The terms of the settlement are confidential, he said.

“We have to finalize the settlement documents, but the suit will be dismissed,” Dahlin said.

The lawyer for Kotara and Destination Resort Group, Gerald Martin, said the details of the settlement are not complete.

“It appears that some people misunderstood each other, and that’s the reason this thing got started in the first place,” Martin said.

S&H Group said in the suit that Kotara, who controls the other two-thirds of the company, tried to forcibly buy out the group against oral and written agreements that restricted that from happening.

The suit states that Destination Resort Group owns a 20 percent share in Remington Ranch LLC, which owns the Powell Butte resort that is in the early stages of development. Destination Resort Group has the exclusive option to buy and develop the area for overnight rental properties within Remington Ranch, and its interest in the resort is worth more than $100 million, according to the text of the lawsuit.

The plans for Remington Ranch call for 800 single-family homes and 400 overnight units on 2,100 acres in Powell Butte. Home prices are expected to average $3 million to $4 million and the property will include three golf courses. The resort has received approval for its initial development plan.

The lawsuit states that Kotara tried to buy S&H Group’s stake in Destination Resort Group for $200,000, although S&H had invested more than $4 million in the company. It also says that in August 2006 Kotara bought out another member, Kevin Warner, for $6 million.

Kotara and Warner also are involved in a proposed 40-acre subdivision in Madras, according to earlier reports in The Bulletin. Kotara purchased the property for $1.2 million in 2006 and said he subsequently sold it to Warner.

Remington Ranch Project Manager Chris Pippin said the dispute has “virtually no” effect on the resort project. Pippin works for Winchester Development, which has a majority interest in the resort.

“Remington Ranch was not a party to the suit, and we were not involved,” Pippin said. “They’re a minority shareholder and that’s all, so they have no operational control and no say over development issues of any kind.”

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