The Mountain City Club will get back $2 million plus interest after one of its now-ousted officers loaned the money without the consent of members, according to court records and an agreed-upon order in Hamilton County Circuit Court.
Chris Allen, the Mountain City Club’s former treasurer, loaned $2 million of the organization’s money to a business planning to turn the old county jail in downtown Chattanooga into a music studio, according to court documents. Jimmy White, the CEO of Urban Story Ventures, is developing the project, dubbed Jailhouse Studios.
The court has not yet determined the status of rights that Allen negotiated in connection with the loan, including the ability to lease or buy property at a 120-acre riverfront development by Urban Story Ventures called The Bend, the club’s attorney, Bill Horton, said Monday.
White was unaware Allen made the loan without agreement from the club’s board at the time, according to court records. He and the Mountain City Club are now suing Allen, Allen’s limited liability company and the former club president, Richard Johnson. Johnson and Allen were both booted out of their leadership roles in a 70-9 vote in April, although Johnson has challenged the legitimacy of that ouster.