CHATTANOOGA — The Mountain City Club in Chattanooga faces legal action over the unauthorized $475,000 purchase of a yacht that has since become a total loss, with Circuit Court Judge J.B. Bennett recommending mediation to resolve the dispute by July 22, 2026. The controversy centers on financial decisions made by former club leadership that allegedly bypassed board oversight and resulted in losses.

Attorney Bill Horton stated the yacht, named "The Lady Helen," requires repairs costing more than twice its purchase price. "The Lady Helen is consequently a total loss," Horton said in a court filing. The vessel began to list and suffered damage after taking on water during a rainstorm and is now docked at Ross's Landing wharf, where it incurs a $2,500 monthly fee from Erwin Marine.

Lawsuits allege the yacht was acquired while Richard Johnson served as club president and Chris Allen as treasurer, without board approval. Horton stated that funds for the purchase were transferred from club accounts to Mountain City Management Company (MCMC), an LLC owned by Allen. "There was no board approval. This was a two-man show," Horton said.

He also reported $230,000 in miscellaneous charges related to the yacht and asserted that Allen "is guilty of gross negligence." Following the revelations, Johnson and Allen were removed from their positions during a special club meeting. The new club board has since sued both former officers, who have filed counter-suits. Judge Bennett recommended mediation to settle the matter and suggested John Blankenship as mediator, with a decision on whether to proceed scheduled for July 22, 2026.

The dispute highlights governance failures within a private club that allegedly led to the misuse of organizational funds. The yacht purchase is part of a broader pattern of financial transactions involving MCMC, including a $2 million loan from club funds to developer Jimmy White, which also passed through the LLC owned solely by Allen. The outcome of the mediation decision could set a precedent for accountability in nonprofit or member-based organizations when fiduciary duties are allegedly breached.