Colony Lender faces court sanctions, vows appeal

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The Colony Association of Unit Owners were pleased with Judge Rodney May when he ruled last Tuesday that Colony Lender and Unicorp were in violation of an earlier court decision and sanctions will likely be imposed.

The Association had asked Judge May to consider their accusation that Colony Lender and Unicorp violated a directive in attempting to collect what Colony Lender maintains is money owed by the Unit Owners based on the recreational lease that once was held by Murf Klauber in a corporation whose assets Colony Lender acquired when it completed the foreclosure on that element of the now-shuttered resort.

The recreation lease provided for the use of the tennis courts and associated amenities for the owners of the once flourishing 252 unit resort that has been closed since 2010 and since mired in lawsuits.

In August 2014, Colony Lender claimed as owner of the recreation facilities and property, it had the right to collect the recreation lease monies owed as the new landlord. Colony Lender made a request for the unpaid rent and then sued for the amount owed under the original lease agreement.

Unicorp offered at that time to indemnify any unit owner from any and all liabilities associated with the Colony if they sold their unit.

In a litigation report sent by Warren to Unit Owners in December 2014, Warren wrote, “We understand that The Colony Lender action is very disconcerting to unit owners, this is why Colony Lender/Unicorp filed the suit; they are looking to add frustration and delay and cost so that unit owners give up and transfer their units to Unicorp.”

Warren went on to write that it was “Very gratifying to know that the unit owners are united in defeating this common enemy.”

What is not disputed is the fact that Colony Lender and Unicorp own and control the tennis courts and recreational property.

Colony Lender filed a lawsuit in Sarasota County last year seeking to recover money owed on the recreation lease on the basis that they asserted that the lease money owed was transferred to them when they bought the property.

Colony Lender’s David Siegal has maintained that common law and state law supports the notion that lease monies and rents due go along with the owner of a property upon its sale.

Siegal said, “How could a shopping center be owned by the bank after a foreclosure and the old borrower can still collect rent by the GAP? How can somebody else own the rent due on the remaining 64 years left on a lease of our property? Only in Judge May’s courtroom; until he is reversed on appeal. Realize he has been reversed on appeal five times already in the Colony case. Now there will be six. That’s not even minor league ball”


Who owns what?

The Association argued to Judge May that the recreational lease damages and money owed under the recreation lease agreement was not real property and was not part of what Colony Lender acquired when the assets of one of Klauber’s former entities was sold at auction and Colony Lender was the high bidder.

The Association of Unit Owners argued to Judge May that Colony Lender were also precluded from sending demand letters because of a bankruptcy court-initiated stay which was placed on the Chapter 7 estate.

Last November, Judge May in his courtroom requested briefs on whether Colony Lender/Unicorp’s collection efforts interfered with the dissolution of the rest of the Colony estates and the rights of the Association.

In last Tuesday’s court hearing, Judge May asked the Association of Unit Owners to recommend what equitable remedies and monetary sanctions should be imposed and according to Association President Jay Yablon, that will be sent to the Judge “in the coming days.”

Yablon wrote Colony Unit Owners following Tuesday’s hearing that “This is very good news that we have working to procure since late last summer when Colony Lender and Unicorp first sent threatening letters to the unit Owners followed by the filing of lawsuits and lis pendens in the state court slandering the titles of individual unit owners.”

Yablon added that Colony Lender and Unicorp have tried to make it “impossible to proceed with any redevelopment until the Unit Owners have all handed over their units to Unicorp under duress for sale prices of next to nothing.”

Yablon continued, “I cringe every time I have to write another assessment check to pay largely for legal fees and insurance with seemingly no end in sight, in the face of development progress that has been deliberately blockaded by Colony Lender and Unicorp as a form of psychological warfare against the Unit Owners…”

Siegal says there is no violation of the automatic stay and the matter will simply be appealed like everything else Judge May has done.

“Instead of following the law,  Judge May does what he wants and we get the law applied when we go to District Court and that is simply what is happening here. Judge May is a stepping-stone to the District Court, Said Siegal.


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