Colony report claims ‘Lender’ is impediment
In a letter dated Jan. 2 to Mayor Jim Brown, Colony Association Attorney Jeffrey Warren wrote the first quarterly report to the town regarding the Colony Beach and Tennis Club Association’s ongoing litigation which will ultimately dictate control of the Colony to either the Association, the Colony Lender, LLC, or Dr. Murray ‘Murf’ Klauber.
Warren says that although the Colony Association of Unit Owners has not yet reached an agreement with any of the other parties, either Klauber or Colony Lenders Randy Langley and David Seigel, that the Association is working with Klauber in an attempt to resolve the bankruptcy case.
Warren wrote, “The Association can report that during the recent exchange of offers with the Chapter 7 Trustee (the “Chapter 7 Trustee”) for the Colony Beach and Tennis Club, Ltd. (the “Partnership”) attempting to resolve the primary litigation dispute relating to the claims of the Partnership against the Association (which claims the Chapter 7 Trustee now controls), it was determined that a major impediment to reaching a settlement had become the disputed claims against the Partnership by Colony Lender, LLC [owned by Randy Langley and David Siegel], the entity that acquired certain loans made to the Partnership and to Dr. Klauber and his various entities (collectively, the “Klauber Entitites”). The Chapter 7 Trustee and the Association reached an agreement whereby consent was given to the Association to allow the Association to pursue a challenge to the Colony Lender, LLC claims against the Partnership in the Partnership’s Chapter 7 bankruptcy case. The Klauber Entities are cooperating with the Association in this activity. It is believed that an early resolution of these issues may facilitate settlement.”
Colony Association representatives recently went to meet and discuss settlement issues with representatives of Breakpointe, LLC, the owner of a 5 percent undivided interest in the Outparcels and other properties within the Condominium Parcel, and with Breakpointe I, LLC, a lender to Dr. Klauber holding a mortgage on some of his units at The Colony, according to Warren.
Warren also informed the town that the Association is currently working with several prospective development partners who have expressed significant interest in the redevelopment of the Colony. Each of the possible development partners has demonstrated that it has immediate access to money needed to achieve a complete and successful redevelopment of the Colony.
Ejectment matter is resolved
The Bankruptcy Court denied the Chapter 7 Trustee’s motion seeking to vacate the order and final judgment granting ejectment of the Partnership from The Colony. The Chapter 7 Trustee did not appeal the ruling, which means that the Unit Owners will retain exclusive possession of their units and the common areas of the Condominium Parcel. According to Warren, this ruling allows the Unit Owners to continue their efforts to redevelop the Colony.
Matters still unresolved in pending State Court litigation
The Klauber Entities are currently defending an action being pursued by Colony Lender, LLC in the Circuit Court of Sarasota County, seeking foreclosure against certain of the real estate holdings of the various Klauber Entities at the Colony, and although the Association is not a party to this litigation Warren wrote, “the resolution of the foreclosure is directly linked to the settlement negotiations because the ultimate ownership of a significant undivided interest in the out Parcels is the focus of this dispute and the lis pendens filed in the case precludes the Klauber Entities from delivering clear title to any of their properties as part of a settlement. This foreclosure action is scheduled for a trial set to begin the middle of January 2013.”
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