CHATTANOOGA — On April 7, 2026, Mountain City Club members in Chattanooga voted to replace the club’s board after allegations of financial misconduct involving a $2 million transfer to an LLC, payments to developer Jimmy White, and the purchase of a sinking yacht named the Lady Helen. Members approved the new board by a vote of 68 to 11, following a 70-9 vote to dismiss the previous leadership.

The club had received a $9 million payout from the sale of its longtime Chestnut Street headquarters and relocated to the Gilman Building. Attorney Bill Horton, representing the new board, said the club now faces “a huge tax problem.” related to capital gains from that sale. He stated that $2 million of club funds was transferred to an LLC owned by former treasurer Chris Allen—later renamed Mountain City Management Corporation—and then passed to White for his Jailhouse Studios project. The club has not recovered those funds. Horton also said club money was used to purchase the Lady Helen, a yacht on which over $700,000 has been spent; the vessel is now sinking in the Tennessee River. Most members were unaware of the purchase until after it arrived at Ross’s Landing.

Attorney Herbert Thornbury, a club member, said the $2 million wire to White occurred on December 19 and added, “I think the feds call it something else.” He also stated, “Not one board member was told anything about.” the loan made with club funds.

Chancellor Jeff Atherton declined to issue an injunction sought by the old board and said calling a new election “would cause problems and harm to the club.” He added, “This club is highly regarded in our community. Continuing this dispute can't serve anybody's interests.”