Local Points of Interest

 

HISTORY OF RIMROC MEADOWS OF WASHINGTON, INC.

(THE CORPORATION)

The Beginning

 Rimrock was originally developed by a company called “Wendell West”.  This land development company would go throughout the United States, purchase land, and develop it into resort-type areas.  A gentleman named Glen Corning who lived in Ocean Shores and was a partner in Wendell West was a main player in developing Rimrock.  Glen Corning originally owned the house currently owned by Pete Musland, the airport strip, and approximately 140 acres that surround the house.  When Rimrock was originally developed, there were the facilities at Horseshoe Park that we have today, as well as a racetrack, airport, and 27,000 additional acres of land extending all the way to Jameson Lake with plans to build a golf course.  Those were busy times for Rimrock with horse races, continuing development, and big plans for the future.  As part of their promotional program to develop Rimrock and sell lots, they had Pat Boone, the celebrity, as a spokesperson for Wendell West to promote Rimrock.  Wendell West also had a program to buy “your piece of the West” to military personnel throughout the United States, mostly sight unseen.  That explains why we have original lot-owners that live oversees and in areas of the United States far away from Rimrock.  Many of those lot owners have never even visited Rimrock. When Wendell West would sell lots on contract, a company called North American Acceptance Corporation (NAAC) held their contracts

 Wendell West Declares Bankruptcy

 Unfortunately, in 1968/1969 Wendell West went bankrupt and the big plans came to a halt.  At that point, NAAC became the owner and developer of Rimrock and they bought Wendell West out of bankruptcy court.  NAAC made their money off of thrift notes - their profession was not development of property.  In the case of Wendell West, they had to become a developer as NAAC now owned many other resorts across the United States, similar to Rimrock.

 NAAC Declares Bankruptcy

 NAAC had a parent company out of Dallas, Texas called OMEGA.  OMEGA came to NAAC and requested $20 million to develop properties.  However, OMEGA did not give any collateral, but just took the money.  Because of this, NAAC’s statement of review came up with a large unsecured loan.  When this happened in 1973/1974, all of the investors wanted their money back.  NAAC had $85 million in assets, but still showed $20 million under.  After the third day of investors removing their money, NAAC decided to go bankrupt to stop giving out money. 

NAAC was bankrupt as a parent company for about 60 days.  At that point, Rimrock Meadows, Discover Bay, Desert Carmel, and Honolulu were unto themselves and not involved in the NAAC bankruptcy.  Sixty days after the fact, NAAC pulled these resorts into the bankruptcy along with them.  At that point, Rimrock went bankrupt along with NAAC properties. 

The Beginning of the Corporation – The Plan of Reorganization

 Rimrock Meadows went along in bankruptcy for a few years.  After that, a couple lot owners went to Charlie Johnson (Rimrock’s attorney) and his partner and filed a class action suit against NAAC - the class action suit was NAAC of Washington vs. NAAC of Atlanta.  Meanwhile, due to the bankruptcy, the bankruptcy court continued to take Rimrock’s money back to Atlanta to pay off creditors of NAAC.  The class action suit took two years, but that suit put a stop to the parent company taking funds from NAAC of Washington.  The result of the class action was a court-ordered Plan of Reorganization in 1981.  Another result of the Plan of Reorganization was the fact that the Court awarded approximately 20,000 acres to a Texas land-holding company called Contran.  Rimrock would retain and control only 7,000 acres.  Over time, The Nature Conservancy has purchased all of the Contran property and they now control the approximately 20,000 acres surrounding Rimrock.  The racetrack property that was owned by Rimrock was eventually sold as well and has had a few owners over the years.  It is now in the ownership of Pete Musland.

 The Plan of Reorganization began a new corporation.  The corporation was given a new name – Rimroc Meadows of Washington, Inc.  It was only with the court-ordered Plan of Reorganization that the Corporation evolved.  This plan called for vendees (those who purchased property prior to the date of bankruptcy) to be given 1 share of stock for each $100 vested.  A person who paid $1,800 for a Rimrock lot would now own 18 shares of stock.   

Association and Corporation

 At this point in time all of the lot owners were shareholders of Rimroc Meadows of Washington, Inc. as well members of the membership “Association”.  Both companies had their own Bylaws and Articles of Incorporation to manage their separate entities.  However, since lot owners at that time were dually part of the Corporation and Association, Rimrock was basically managed as “one” company with the Corporation and Association operating side by side.  The Corporation was the “developer” and the Association was the “membership association”.  It must be noted, however, that as the developer, the Corporation “owned” the property and was responsible for all decisions pertaining to the ownership and development of the property.  The Association was simply a membership association.  The shareholders were members of the Association because they owned lots at Rimrock, however, the Association members that purchased after bankruptcy were not members of the Corporation and therefore were not involved in development decisions.  In that respect the two entities were separate.  A major difference in the structure of the Corporation vs. the Association was the dues structure.  The original Articles of Incorporation for the Association set the dues for members at $10 per month ($120 per year) and charter members (shareholder) at $2 per month ($24 per year).  This dues structure was created to benefit the shareholders, as they were the backbone of Rimrock and the people that invested their money to keep Rimrock in business.  The prices the original lot owners paid were higher than those that purchased after bankruptcy and they also had to go through the bankruptcy and pay additional fees for what they considered a bad investment at the time.  The Articles of Incorporation also set that any dues increase to charter members (shareholders) must be approved by the majority vote of a quorum of shareholders while the dues for regular members (after bankruptcy) could be approved by the majority vote of the Association’s Board of Directors.  In essence, the shareholders were given the authority to vote on any increases to their dues and the regular members could have an increase voted in by the Association Board of Directors.  This issue caused a great deal of frustration to Association members and didn’t seem fair.  The Association needed this flexibility however to remain solvent and prevent future bankruptcies.  Once again, the Corporation was the “developer” and only due to the people that invested in Rimrock did Rimrock exist.  At this point in time too, the Corporation was financially subsidizing the Association.

 In the years that followed, as Rimrock began to get on track and grow, the number of new people purchasing lots was increasing at Rimrock.  It took several years, but in the late 1990s it was becoming obvious that there were two separate groups – Corporate members (shareholders) and Association members (lot owners after bankruptcy). The Corporation had for many years subsidized the Association financially as it was developing, growing, and becoming what it is today.  The time would come, however, as stated in the original Plan of Reorganization, that when the Association was financially stable and able to make it on its own, the Corporation (developer) would dissolve and the Association would take over all aspects of Rimrock.  The Association was showing signs that they were ready to take on this hurdle.  In preparation for this, in the late 1990s the separation began to occur.  The boards separated and the finances were more clearly separated.  The Association Board of Directors approved a dues increase increasing dues to $180 per year after an advisory vote in hopes that this would make them more financially stable and less reliant on the Corporation.  The Corporation also voted to increase their dues the same percentages to $36 per year.  Lot sales continued to increase over the years and there became more and more Association members that enjoyed the peace and serenity of Rimrock.  

TNC and Dissolution of the Corporation

 During 1999/2000, the Corporation was being faced with increasing offers for land developers to purchase portions of Rimrock.  Along with many informal offers, The Board was presented with two formal offers. One offer was from a real estate company that wanted to purchase the land on the west side of McCarteney creek to develop a competing resort.  The other offer was from The Nature Conservancy for a conservation easement.  The Nature Conservancy’s offer allowed Rimrock to retain ownership in the property and only sell the “development” rights to The Nature Conservancy.  This conservation easement would preserve the land on the west side of McCarteney Creek from development.  Future generations of people that enjoy Rimrock would always enjoy the beauty of Rimrock without the threat of competing development. The rights for Rimrock members to enjoy the property would be retained.  Both offers were valid and came at a time that the shareholders would be making a decision whether or not to dissolve.  On October 6, 2000 a conservation easement with The Nature Conservancy was approved.  This easement allows members to continue to enjoy hiking and hunting on the property in a similar manner as before. 

 A formal Plan of Dissolution was sent to the Corporation shareholders and approved at a special meeting in November 2000.  The shareholders were then required to surrender their share certificates in return for their entitled dividend.  After this date, the legal ownership of the property (including the easement property) and all aspects of managing Rimrock were transferred from the Corporation to the Association. 

 

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