The sale of Creative Leisure in December 2004 and the winding down of its resort product in October of last year has given rise to a financial dispute between the seller, Peter Henze, and the buyers.
Each side wants money from the other, in a case now pending before the U.S. District Court in the Southern District of New York.
In an initial complaint, Henze accused the buyers, now identified as the "new" Creative Leisure International (formerly Gural) and World Travel Holdings, of recklessly managing the firm without regard to their duty to protect his financial interests.
The defendants, Creative Leisure and World Travel Holdings, denied all accusations of mismanagement and wrongdoing and filed a counterclaim.
According to the Henze complaint, Gural, a firm owned by Bradley and Jeff Tolkin, purchased Creative Leisure from Henze, who had been owner and president for 32 years.
Henze was to be paid over a four-year period, receiving a minimum of $330,000 per year plus possible additional payments based on company performance. Henze also owed the company some $1.3 million plus interest, and under the terms of sale, any additional performance-based payments were to be applied to that debt.
Henze received the minimum payment for the four years, totaling $1.32 million, but not any of the performance-based payments to offset his personal debt. In fact, Creative Leisure and World Travel Holdings this spring started efforts to collect on that debt.
In his filing, Henze said the defendants breached their duty to manage Creative Leisure "reasonably," and he is seeking actual damages in the amount of the personal debt plus interest or to bar the defendants from attempting to collect on the personal loan. He also asked for compensatory and punitive damages.
Creative Leisure and World Travel Holding’s countersuit seeks to collect the $1.3 million loan to Henze, plus interest, penalties, legal fees and other costs.
This report has been corrected to clarify the names of the parties being sued; they are Creative Leisure International and World Travel Holdings, not the co-CEOs, Bradley and Jeff Tolkin.