On a sunny afternoon in February, people wearing floral dresses and khaki shorts gathered at the newly refurbished beach club of Grand Harbor, an 850-acre master-planned community about 15 minutes north of Florida’s Atlantic-facing Vero Beach. Over glasses of champagne and plates of sushi, just steps from the shore, the club members toasted to the success of the $3 million renovation—and the good times yet to come.

Founded in the early ‘90s, Grand Harbor is having itself a renaissance. The club has added 370 new paying members since the beginning of 2021, pushing the total membership count to nearly 1,000. On any given day its facilities – two championship 18-hole golf courses, sundry pickleball and tennis courts, a fitness center and clubhouse, and of course that new beach club – all teem with activity.

“People want to be in Grand Harbor,” says Wendy Rochester, a club member and local realtor who sells properties in the 1,200-home (and growing) Grand Harbor complex, where condos and single-family homes are nestled along intracoastal waterways of the Indian River. “Right now we’re riding a strong wave,” says Phil Schwin, who has lived in Grand Harbor since 2000.

But beneath this sunny exterior, Grand Harbor and several of its leading denizens are duking it out in the courts with Carl Icahn, the Wall Street heavyweight who made his fortune raiding corporations and striking billion-dollar deals. The 88-year-old tycoon, who lives 150 miles south in a 14,000-square-foot palace on the exclusive Indian Creek Island, purchased Grand Harbor in 2004 from its original developer. For over 15 years, the club was a small, unnoticed asset in Icahn’s larger investment portfolio.

In December 2020, Icahn handed the club over to its members for nothing after years of growing complaints about underinvestment, declining membership, and threats of litigation. The amount of money at stake wasn't worth the time and effort for Icahn, according to a person familiar with his thinking at the time. That might have been the end of the story, but Grand Harbor members and homeowners decided to sue Icahn’s companies anyway in early 2021. In two separate lawsuits, they claim that Icahn’s companies were legally obligated to pay their club millions of dollars for repairs and maintenance that they had not funded while in........

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