Here is the article... at the end of the day, you would think the "deep pockets" (i.e. deepdale members) would win out.. we will see. I have played there several times, and it is one of the finest all around facilities (practice range/clubhouse/golf course) I have seen.
Teed Off:
When Caddyshack
Meets Wall Street
Dissident Deepdale Shareholders
Say the Operation Is Too Clubby,
But Is It All About the Green?
By RANDALL SMITH
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Call it the great Wall Street golf-course clash.
For decades, the elite Deepdale Golf Club in Manhasset, Long Island, has been the private preserve of the Allen family and its late patriarch Charles Allen, its membership attracted by the cachet of media and finance investment-banking boutique Allen & Co. Members such as TV anchor Tom Brokaw, movie star Sean Connery and top Wall Street executives Henry Kravis, Eric Gleacher and Pete Peterson can usually tee off without a reservation, even on weekends.
Now, its genteel clubbiness has been roiled by a court challenge from a dissident group led by the president of Baird Patrick & Co. The securities firm, with just 15 brokers, ranks far down the Wall Street food chain from the Allens.
Stuart Patrick, whose father Joseph is a longtime Deepdale member and its past treasurer, is pressing for actions such as a dues increase, a sale of the property or a stock buyback that would boost the value of the Patrick family's 19% stake in a private company that owns the club's land. A sale of the land could represent a $7 million windfall for the Patricks. The Allens, however, own 38% of the company, Real Property Owners Inc. -- enough, they say, to block a sale.
The dust-up resembles a mini version of a Wall Street takeover battle. It has a disputed, since-withdrawn $35 million buyout bid from a company owned by investor Carl Icahn. And small investors such as a former Deepdale groundskeeper, who was pressed to invest $2,000 in the club when it faced hard times in the mid-1970s, complain that they need a greater return on their investment.
In a lawsuit filed Jan. 27 in federal court in Manhattan, Stuart Patrick accuses the RPO board of breach of fiduciary duty, saying the directors have "failed to generate a reasonable return to RPO shareholders," the majority of whom aren't Deepdale members. Allens on the RPO board include Broadway producer Terry Allen Kramer, Charles Allen's daughter, her son Nathaniel and Herbert Allen III. (Herbert Allen Jr., who runs Allen & Co., is a member, but hasn't played golf in 30 years.)
The lawsuit says Deepdale's directors "do not desire to have Deepdale pay any reasonable rental to RPO because it would increase the golfing expenses to Deepdale's members [who get] their golf playing hobby wrongfully subsidized by RPO shareholders who are not Deepdale members." Currently, Deepdale pays RPO just enough to cover property taxes and insurance.
Mr. Patrick, who is represented by John Halebian of Lovell Stewart Halebian LLP, estimates in the lawsuit that, for Deepdale to pay a reasonable rent the club's annual dues would have to rise by $15,000 from a current $7,200. The current initiation fee is $100,000.
In an interview, Ms. Kramer calls the $35 million offer "pie in the sky." She adds: "This is something so ridiculous. Everybody should be happy they have a lovely golf course." She and an Allen-family adviser note that an earlier lawsuit, filed by two of the small investors and raising some of the same issues in state court, was dismissed last year. They also maintain that the Allens have no obligation to maximize the stock's value on a short-term basis.
But Charles Amorim, 65, the former groundskeeper who now lives in New Hyde Park on Long Island, says the club's then-manager told him the stock would be a good investment for his retirement when he bought 10 shares for $2,000 in 1976, when his annual pay was just $15,000 -- yet he's never seen any return.
Based on the value of the earlier Icahn offer, they could be worth $22,500. That would boost his current retirement savings by more than 10% and help pay off his mortgage, he says. (He fondly recalls gridiron great Frank Gifford, a Deepdale member, introducing him to Dinah Shore on the practice tee in the 1980s. "She looked fantastic," he says.)
Judith Goodman, 60, who owns a country inn in Peru, Vt., inherited 12 shares from her father, a former real-estate executive and Deepdale member who died in 1972. The money, she says, "would be nice for my sons to have. At this point, this is their grandfather's legacy to them."
Joseph Patrick, 93, RPO's treasurer for the past decade, assembled his stake in RPO over decades, offering to buy shares of some members who died or left the club. He launched the effort to boost its value after the 1999 death of Ms. Kramer's late husband, Deepdale President Irwin Kramer, an Allen & Co. banker. After lunching with Ms. Kramer at the tony La Caravelle restaurant in Manhattan, Mr. Patrick asked her to join the RPO board and consider actions to boost the value of its shares, according to people familiar with the lunch.
The Patricks also spoke with club President John Martin, a former executive of RJR Nabisco Inc., about the club paying RPO more rent, and had the land appraised at $35 million to $40 million in November 2000. While they talked about a possible buyout of the Patrick stake at $1,200 a share, the Allens scuttled the idea, according to people familiar with the talks.
In May 2002, the elder Mr. Patrick notified RPO shareholders by letter that he had received the offer of $35 million, or more than $2,000 per RPO share, from Mr. Icahn's Bayswater Development LLC. The four-page proposal dated March 18, 2002, from Bayswater Vice President Gary Friedland was conditioned on rezoning the 175-acre tract for 350 housing units.
The Allens and the Patricks faced off soon after, in a meeting at the wood-paneled offices of Allen & Co. on Fifth Avenue. Stuart Patrick, 64, recalls, "They acted upset. For the first time, they began to see that they were not going to call all the shots as they have in the past."
Ms. Kramer told the Patricks that the Allens wouldn't sell, and owned enough shares to block any sale under New York state law, according to people present. "That's not entirely true," Mr. Patrick recalls saying. "There could be a court action to dissolve the property," his lawyer, Mr. Halebian, recalls explaining at the meeting. Buy us out or we'll buy you out, the Patricks suggested. The Allens soon offered RPO holders $900 a share, plus any additional proceeds if the land were sold within 10 years in a voluntary sale.
But the Patricks rejected the Allen offer as too low, also noting that the additional proceeds wouldn't be payable in an involuntary sale, which could occur if a local government acquired the property through eminent domain for a municipal course. Local officials say they would like to acquire the property, but not through condemnation. "I'd love to acquire it, but it's premature to discuss," says Marvin Natiss, Mayor of North Hills, N.Y.
Meanwhile, on Aug. 2, 2002, Ms. Kramer and Herbert Allen III wrote Bayswater's Mr. Friedland saying the Deepdale property "is not for sale." Behind the scenes, both Ms. Kramer and another Deepdale member, art gallery owner William Acquavella, asked Mr. Icahn whether he was aware of the Bayswater offer and the Deepdale situation. Mr. Icahn said he didn't know anything about it, according to people familiar with those conversations. On Oct. 16, Bayswater withdrew the offer, saying it had been "misinformed" about the land's availability.
In September 2002, Mr. Amorim and Ms. Goodman, who are also represented by Mr. Halebian, filed suit in state court in Long Island against Ms. Kramer and Herbert Allen III, accusing them of breaching their fiduciary duty to RPO shareholders by refusing to "obtain any reasonable rental return" or consider a sale.
But Judge Ira Warshawsky, after ordering RPO to conduct a valid election of directors, dismissed the lawsuit in May 2003, for "failure to make demand ... upon the board." The new board includes society money manager Dixon Boardman and famed investor Richard Rainwater plus the Allens. The plaintiffs have appealed.
"The case was thrown out once before and I assume it will be thrown out again," Ms. Kramer says. She says the dispute is "just about money." People close to the Allen family attribute the battle partly to the fact that the younger Mr. Patrick, who lives in Glen Ridge, N.J., and belongs to the Montclair Golf Club, isn't a Deepdale member and thus lacks any sentimental ties to it.
Stuart Patrick acknowledges that neither he nor his father "have the same close relationship with the younger generation of Allens" as the elder Mr. Patrick did with Charles Allen. Indeed, Deepdale last week threatened to expel Joseph Patrick if he didn't resign voluntarily, as requested in January, based on his "involvement" in the state court lawsuit and "other actions ... prejudicial to the welfare of the club."