Ocean Shores was designed as a camping destination.  Some 12,000 lots were laid out by the Ocean Shores Lot Owners Association and the Ocean Shores Community Club (The Club) was built and acted as a government in addition to the recreational facilities it built.  “…the original Articles of Incorporation empowered the Community Club to build and maintain roads and bridges, collect and dispose of garbage, to prevent and suppress fires, to provide police protection, to provide street lighting, provide weed and animal control, to regulate signs and billboards, to acquire and maintain water generation and distribution facilities, to acquire and maintain parks, playgrounds and a wide variety of other recreational facilities, and to do anything else necessary and incidental to the peace, health, comfort, safety, and/or general welfare of its members.”

In the early 1970’s, many of The Club’s obligations were removed when the town incorporated and The Club was no longer involved with providing anything except recreational services.  Because of the incorporation, people began to sue to withdraw from The Club.  They felt, rightfully, The Club was no longer providing all of the contracted services anymore.

The obvious problem for The Club was their income was threatened (The Club was solvent at the time).  They filed for bankruptcy not because they were having financial problems, but because of the changing situation: The Club was faced without having sufficient income if the members were allowed to resign from The Club. 

The Club’s answer was to file for bankruptcy.  And that’s where things get weird…