Almost from its conception three years ago, Traditions Golf Club was in trouble. But now owner Ken Heil is hoping that the private club in Boone County, Ky., is finally on solid ground.
The club settled a lawsuit filed by Star Bank NA Kentucky Sept. 2, restructuring debt on loans of more than $3 million. With the settlement, Heil said, the club should be able to look forward.
“Basically, I just want to be done with all this and to get back to what matters — and that’s golf,” Heil said.
Heil, an avid golfer who owns the Barleycorn’s chain of restaurants, declined to comment on the settlement but issued a release calling it a “conversion of Traditions’ construction loan to permanent financing.”
“I am happy Star Bank has provided us with the financial means to get on with building our business,” he wrote.
It was a $2.8 million construction loan from Kentucky National Bank — which was acquired by Star in 1990 — that got Traditions in trouble. Heil and his wife, Barbara, secured the loan with the property and equipment on the grounds, and also with each Barleycorn’s restaurant.
But when Star sent Heil a letter in November 1991 asking for more than $45,000 in back payments and interest on the loan, his reaction was immediate. He blamed Michael Macke, former partner in the club and the owner of a Cincinnati-based construction and development company.
Heil had bought out Macke’s 50 percent share in Traditions Dec. 31, 1990.
Heil had filed suit against Macke in March 1991, charging that his former partner had agreed to build the course and then had mismanaged the construction enough to put the loan in jeopardy. Macke had used $1.9 million of the loan, leaving more than $300,000 “unaccounted for,” the suit charged.
Macke and Heil settled that suit in April 1991. Details of the settlement were confidential.
When Heil and partner Macke agreed to build and open Traditions in February of 1990, the future seemed rosy for the pair. Heil was the owner of seven successful Barleycorn’s locations and also ran a prosperous riverboat operation. Macke ran a commercial construction company, and the pair agreed that Macke would build the golf course. Each partner put $50,000 in cash into the club.
In return, Traditions would pay Macke for his costs and add another 10 percent. It all seemed to fit.
But almost immediately, problems arose. According to papers filed in Boone County Circuit Court, Macke bought materials for use at Traditions and used them to build other golf courses. While the agreement with KNB specified that the bank would approve Macke’s budgets and expenditures, Heil charges in a counterclaim that the bank never did that.
“Plaintiffs (the bank) failed to prevent Mr. Macke from wasting and looting the corporate assets,” Heil charged in his counterclaim.
In return, Star charged that Heil’s settlement with Macke makes him liable for the loan payments. Both Ken and Barbara Heil had signed personal guarantees for the loan, and interim loans totaling $1.5 million were personal loans to Heil and Macke, the bank said in its lawsuit.
Star Bank spokesman Steve Dale declined to comment on the settlement, and Macke couldn’t be reached.