On April 12, 2022, a group of Palmetto Bluff property owners initiated a legal action in the County of Beaufort’s Court of Common Pleas, which is the relevant court for a real estate dispute concerning Palmetto Bluff.  The filing is essentially a “Complaint,” and asks that the Defendants respond to the arguments in the Complaint.  For those who have had trouble accessing the document, here is a PDF copy of the Complaint {Click Here}

To best understand this FAQ and the substance of the legal action, we suggest you first read (or re-read) three other PBNA FAQs found on the PBNA Website to familiarize yourself with the basics:

• What is the longstanding controversy around the rental properties, and when will this be settled?
• Can you explain in plain English the various entities that make up Palmetto Bluff?
• I was given a lot of documents when I bought my property, but I never read them. I also understand there are other important governing documents. What do I need to know about these?

This legal action was initiated by a group of approximately 20 Palmetto Bluff property owners (some are individuals, others are couples, trusts, or LLCs)—collectively known as the plaintiffs—against several Palmetto Bluff entities as well as individuals who are Stewards of the PB Preservation Trust’s governing board:

• Defendant entities include PB Development, PB Club, PBLH (hotel owner), PB Real Estate, PB Preservation Trust, PB Preservation Trust Board of Stewards, SSP, along with a placeholder for additional entities as may be identified as the legal action proceeds
• Defendant individuals, all members of the PB Preservation Trust’s governing board, include Jordan Phillips, Mark Polities, Gray Ferguson, and Henry Armistead

The 83-page Complaint is broad and comprehensive.  The Complaint:

• Is not limited to the Short-Term Rental (SRT) issues; rather
• Argues that the underlying PB governing documents are illegal under SC law
• Argues that the owners have operated inappropriately and have failed to meet their fiduciary obligations and duty of care

This legal action could have broad implications for all PB property owners.  While it is impossible to predict what will happen, here are some things to keep in mind:

• The expected litigation is likely to take two to four years
• All filings and court proceedings are public documents, and are likely to attract attention from the press, the real estate broker community, and other interested parties
• The litigation may create a cloud of uncertainty, which some property owners believe could hamper the marketability and value of PB homes and lots
• If certain of PB’s governing documents are declared illegal, it is unclear how new documents would be drafted and approved

To keep this FAQ brief (and timely), we will post additional FAQs as relevant information becomes available.

One more thing:  As this FAQ describes the circumstances around a legal matter, a disclaimer is in order.  Please know PBNA is simply an observer and is not party to the action and has no access to any material non-public information.  Should any of our kind readers choose to join this legal action, you cannot and should not rely on any information from the PBNA.

PBNA Volunteers

Bob Morette, Arian Ellis, Harry Haslam, Graz Graziano, Ford Bartholow, Eric Sutherland, Richard Cedrone