Wilmington resident Bill Stewart says his hopes were raised last October, when Hermitage Club President Jim Barnes announced that a moratorium on the refunds that had been in place since March 2017 had been lifted. But since then, he says, he has received no refund, and club officials have not told him when he might see a check.
Hermitage Club officials say their priority is the club’s overall financial picture.
“The Hermitage Club is currently focused on shoring up its short- and long-term financial health with the assistance of a new advisory board and chief restructuring officer,” said Hermitage Club Director of Marketing and Public Relations Meridith Dennes in a statement. “We are looking at each individual situation to make sure we are complying with our most current governance. It is our intention to find an outcome suitable to all parties. Progress is being made each day in creating a sustainable business that brings so many visitors to experience all the Valley has to offer and supports so many local jobs.”
Stewart was among the first 10 members to purchase a $20,000 membership shortly after Tropical Storm Irene. He says he thought of the membership as an investment in the local economy. But in September 2016, Stewart and his wife decided to resign their membership. According to their contract, they would receive a full $20,000 refund after the club sold another membership. But the contract also included a stipulation that the club could amend its rules at any time, and Stewart found that the rules had changed to require the sale of three new (now $85,000) membersips after a member resigned before his $20,000 refund would be issued.
Stewart says club officials told him his refund was being processed on March 2, 2017. The next day, the club announced a moratorium on refunds of initiation fees.
In September 2017, Stewart submitted a complaint to the Vermont Attorney General’s Consumer Assistance Program, which serves as a mediator to resolve issues between businesses and consumers. Although the club submitted an initial response to the complaint, Stewart says communication stopped without a resolution.
Stewart also submitted a complaint to the Better Business Bureau. The BBB website gives the Hermitage a grade of “C,” and lists Stewart’s complaint as closed.
Jennifer Ahern, a Wilmington second-home owner, says her experience is similar to Stewart’s. She and her husband resigned their membership in August 2016 after her husband was injured in an accident. According to their membership contract, they expected to receive a refund of $33,000, or 80% of their membership initiation fee after three new memberships were sold. “Over the next several months we continued checking to see if we were on the list, and by December 2016 we were told we had met all the requirements,” Ahearn recalls. “Then there was radio silence for a month or so before we heard they were mailing checks in February. February came and went, and then we got the note that the rules had changed and people can’t resign until next year.”
Ahern says she was surprised that the stipulation in the contract allowing amendments to the club rules would apply to the refunds. “This is not a club rule like ‘please don’t wear boots in the clubhouse,’ it’s a financial agreement,” she says. “If they can change anything on a contract, why sign a contract?”
When Ahern learned of Stewart’s situation, she also submitted a complaint to the Vermont Attorney General’s Consumer Assistance Program in September 2017. She says she never received any reply from the Hermitage Club.
Like Stewart, Ahern says she was happy to hear that the moratorium had been repealed in October, and expected a refund or, at the very least, information or a timetable regarding the refund. But she hasn’t received any responses to her inquiries. “As I wrote in my CAP complaint, I understand their need for cash flow, but they’re still having things like winter concerts,” she says. “That’s not something they have to do. It’s not like that’s in the contract. Scale back on things that are not core operations like parties and concerts. You have to be able to pay off some if not all of the members who have resigned.”
Ahern says she finds it frustrating that the Hermitage Club can simply decide to withhold her money. “If it’s so much money to them that they can’t pay me back, then it’s also too much for me to lose.”
Stewart continues to pursue a resolution, and says he has also contacted the Vermont Department of Financial Regulation.
“Their job is oversight of Vermont-based companies as an investment watchdog,” Stewart says. “Club members have some expectations as investors, and the club is not living up to their part of the bargain.”
Stewart has also explored a class-action legal suit against the club, but he says a club legal officer advised that a lawsuit would not be a worthwhile venture. “He indicated a lawsuit would be a waste of time and money, because there wouldn’t be any funds to pay anyone.”
Ahern and Stewart both say they wish the club well, and continue to believe it has potential as an economic engine in the valley, and as a top-notch private recreational facility. “I don’t want to say anything bad about the club,” Ahern says. “It’s a beautiful place.”
“I think everyone is pulling for them,” says Stewart. “Everyone wants the club to do well. But a lot of people in town are between a rock and a hard place. Contractors are in the same boat.”
Dennes says the club has established an advisory board made up of club members with diverse professional backgrounds to offer guidance on fiscal, facilities, and membership issues, and has also brought in a chief restructuring officer to review the club’s finances and reset its priorities.
“We are making every effort that these members get paid in a timely manner,” Dennes said.