A citizen at the P&Z meeting last week referenced this article from the Clayton Tribune from March 11, and up until now I hadn’t had time to look for it.  Here it is:

County looks at Sky Valley deal options

By Blake Spurney Editor

Wednesday, March 11, 2009 12:13 PM EDT

The Rabun County Board of Commissioners triggered a provision in its contract with Merrill Trust Communities & Resorts LLC to see if the developer of Sky Valley Resort & Country Club will be able to fulfill its contractual obligations.

On Monday, commissioners directed Todd Silliman, a lawyer retained by the county to handle the negotiations with the developer, to contact Merrill Trust to see if the county can get a confidential glimpse at its books.

The contract requires Merrill Trust to “provide updated financial information on an annual basis.”

Commissioner Chairman Virgil Kilby noted that the meeting was called “to discuss Fruit of the Loom sewer activities, rumors that were heard and things of that nature.”

The county is trying to determine whether Merrill Trust will be financially able to pay the county $1.6 million for sewer service if the county lives up to its end up the bargain. To get paid, the county must first obtain a permit from the state for the former Fruit of the Loom wastewater plant. The county is on schedule to receive the permit later this year.

Merrill Trust has been the target of several recent legal actions related to its failure to pay the general contractor and subcontractors for work done on the unfinished clubhouse in Sky Valley. Tom Adams Construction Inc., has filed a $1 million materialmen’s lien against the property.

The county paid about $1.8 million for the former Fruit water and wastewater plants along with about 150 acres. Overall, commissioners took out a $6.4 million loan from the Georgia Environmental Facilities Authority, about $2.3 million of which has been spent. The rest of the money will allow the county to get the plants operable.

Commissioners discussed their options with Silliman – via a conference call while he was on vacation in California – County Attorney Allyn Stockton and consultant Ron Seibenhener.

Stockton said one possible option was for the county to determine Merrill Trust was in “anticipatory breach of contract” if commissioners didn’t think it would be able to fulfill its terms. “But we don’t know for sure,” he said. “All we know are rumors.”

County Administrator Jim Bleckley said he hadn’t talked directly with Merrill Trust representatives in two weeks. He also noted that Harrison Merrill, the head of the company that bears his name, had been in Sky Valley the previous week and that he was working with local creditors in an attempt to sort out the legal troubles.

Silliman said there was some validity to Merrill Trust’s troubles, but he added that the developer had done nothing to Rabun County to suggest it was in breach of the contract. If the company refuses to turn over its financial information, the county then could make a determination of an anticipatory breach of contract.

Seibenhener suggested the county continue working through the permitting process, the cost of which he estimated at $125,000.

Silliman said if Merrill Trust was forced to liquidate by bankruptcy or if it sold its holdings, the next owner would still need the services the county has agreed to provide.

“So long term, one would think the prospects would be good,” he said.

Therefore, commissioners agreed to continue working on obtaining a municipal wastewater permit. Meanwhile, Silliman said his firm would continue to check bankruptcy court dockets to see if Merrill Trust appears on it.

I haven’t found a follow-up article on it.  I checked to see if, like our county BOC, they had agendas of their meetings on the Rabun county website.  They don’t.  They have archived minutes, but the last meeting that had minutes was back in January.