High Country Club Trustee Sues Christian Kirschner For Alleged Misrepresentation

By: Destination Club News
Date: March 15, 2011

Christian Kirschner, the Founder of the bankrupt High Country Club, has been sued by the Chapter 7 trustee Jeffrey Weinman, who claims breach of fiduciary duty, fraudulent and negligent misrepresentation, and concealment of material facts by Kirschner. High Country Club's accounting firm, BKD LLP, has also been sued, with claims including aiding and abetting breach of fiduciary duty and professional malpractice and negligence.

Once one of the fastest growing players in the destination club industry, High Country Club filed for Chapter 7 liquidation in January of 2009. Nearly 100 creditors were listed with debts totaling roughly $25 million at the time of the filing. The value leader in the sector with memberships available for less than most competitors' annual dues, High Country Club's early success led to rapid and overexpansion. Properties became increasingly leveraged and executive salaries skyrocketed in tandem with the club's success, but when the economy began its monumental decline, the High Country Club house of cards collapsed.

"As the HCC properties were never owned by HCC and were highly leveraged, HCC was likely insolvent from the time it was launched," the lawsuit alleges. Multiple residences within the High Country Club had first and second mortgages with "very little remaining equity." Despite being characterized as High Country Club assets, properties belonged to Kirschner through separate LLCs that he owned and operated. The suit alleges that Kirschner was able to distort High Country Club's financial position through the "active assistance of BKD" in its preparation of financial reports.

Perhaps the most damning claim is the assertion that Kirschner continued to market and sell memberships in the months leading up to the bankruptcy filing, "knowing that new members’ funds would be forfeited and that such members would never have an opportunity to utilize any HCC properties," according to the lawsuit.

"We’re in the early stages of the case. The complaint was filed closely on the heels of taking the deposition of Christian Kirschner," said Attorney Patrick Vellone of Allen & Vellone, the law firm representing Weinman.

We have reached out to Kirschner and BKD for comment. Neither have yet responded to our inquiries. We will continue to monitor the case, so please check back frequently. If you are a former High Country Club member and would care to discuss the case or provide any additional insight you have, please visit our High Country Club Discussion Forum to converse about this news and any other information pertaining to the former club.