Homeowners sue Lake Oconee developer

About 50 homeowners in affluent Reynolds Plantation are suing the developers of the Lake Oconee golf and vacation resort for at least $5 million for not repaying money the owners shelled out to join the golf club.

Their attorney, James Johnson, said the homeowners loaned between $65,000 and $400,000 each as “initiation fees,” to Linger Longer Development, which promised to repay the money over a period of time or when the owners sold their homes.

Johnson said it is not unusual for developers to use such initiation fees to continue to develop property. So far, no one has been able to determine where the fees went or to whom they were given or paid, he said. He added that he hopes to find out during the discovery portion of the lawsuit.

The suit alleges Linger Longer Development and other companies and people associated with the Reynolds family, whose main principals were Mercer Reynolds and his cousin Jamie, fraudulently transferred the money and breached contracts.

Calls to the company seeking comment were not returned.

The family-centered company built the resort, but the economic crash put the development under financial pressure. In February 2011 Mercer Reynolds notified community members that lenders were demanding repayment of debt and offered to sell the members the six golf courses, marinas and other areas for $45 million.

They declined, and the property was put into receivership, which happens when a lender and borrower disagree over a loan. Receivers are appointed by judges to try to resolve financial difficulties before foreclosure. The receiver told community members that their loans would not be repaid, the suit says.