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Associated Press
Jack Nicklaus tees off during the Kenny G Gold Pro-Am at the Honda Classic golf tournament in Palm Beach Gardens, Fla., March 3, 2010.

SALT LAKE CITY — As Jack Nicklaus' signature golf tournament teed off in Ohio just after Memorial Day, a Colorado couple filed a federal lawsuit against him over a failed southern Utah luxury resort.

E. Jeffrey Donner, a Fort Collins orthopedic surgeon, and his wife, Judee, claim the legendary golfer "solicited" them in 2007 to buy a $1.5 million membership and lot in the proposed Mount Holly Club, which was to include a Nicklaus-designed 18-hole golf course.

But when the $3.5 billion project near Beaver went belly up, the Donners claim Nicklaus and his company, Jack Nicklaus Golf Club, took no responsibility for the debts and obligations incurred by the primary developer, Mount Holly Partners LLC. The suit contends Nicklaus knew Mount Holly faced serious financial and legal problems but failed to disclose them.

The Donners seek to recoup their investment as well as punitive damages.

"We believe the case has no merit," said Jacque Ramos, one of Nicklaus' Salt Lake attorneys. "The only involvement that Jack had was in the design of the golf course itself."

Mount Holly Partners prominently used Nicklaus' "star power" in its promotional materials, which also featured Olympic skiing gold medalist and Park City native Ted Ligety. "Mt. Holly Club and Jack Nicklaus invite you to become a charter member," reads one glossy brochure.

In addition to golf-in, golf-out homes, developer Marc Jenson envisioned the 1,200-acre private resort in the Tushar Mountains would offer ski-in, ski-out homes, hiking, biking, fly-fishing and an equestrian center.

Court documents show the Donners signed a membership agreement with Mount Holly Club in December 2007, which included a clause relieving the club of liability should the project not be completed.

In addition, Ramos said the couple entered into a release agreement with Mount Holly in April 2010 in which they received the building lot and other concessions.

Doug Owens, a Salt Lake attorney for the Donners, said he can't comment on the case.

At a meeting in Beaver Creek in November 2007, Jenson told the Donners the project was debt-free and had no obstructions to completing, the suit says. Jenson, who was convicted of failing to file a federal tax return in 1991, is not named in the suit.

"In reality, the development was in default on various loans, the development was embroiled in a lawsuit that sought to bring it to a halt and MHC did not have the requisite permits necessary to begin development of the Jack Nicklaus golf course or other aspects of the project," according to the suit.

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Mount Holly Partners filed for bankruptcy in July 2009 and New York-based AMDS Holdings acquired the property in bankruptcy proceedings. It reopened the area known as Eagle Point ski resort this past winter.

Ramos attempted to get a U.S. District judge to seal the case, contending it would protect the interests of third parties from unwarranted negative publicity due to Nicklaus' role as founder of the Memorial Tournament in Columbus, Ohio.

The Donners' lawyer argued that "being a sports icon is not sufficient grounds to close a court record."

Magistrate Judge Brooke C. Wells agreed and kept the file open.

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