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Colony Trustee asks Bankruptcy court for June 26 sale of $23 million judgment

STEVE REID
Editor & Publisher
sreid@lbknews.com

The seemingly never-ending dissolution of The Colony Beach and Tennis Resort continued in court this week.

On June 3, the Trustee for the estate that holds a $23.5 million ruling against the Association of Colony Unit Owners filed a motion to sell the assets to Unicorp for $3.5 million or hold an auction to determine if that is the best and highest offer.

The Chapter 7 Trustee, William Maloney, filed the petition in Bankruptcy Court writing to Judge Rodney May that Unicorp has offered $3.5 million in cash and has delivered a $200,000 deposit into a trust account. The Trustee added that if Judge May enters an order approving the sale, Unicorp will pay an additional $3.3 million in cash to the partnership estate. The Trustee, with Judge May’s approval, intends to solicit higher and better offers through an auction that would occur on June 26, 2015.

Unicorp is a privately held development company based in Orlando and headed by Chuck Whittal. Unicorp controls 2.3 acres of The Colony, the property that held the tennis courts, spa, restaurant and other assets and amenities. Whittal has stated that he seeks to redevelop The Colony with a new high-end resort and condominiums.

Trustee Maloney said that if no higher bids than the contract with Unicorp are received by 4 p.m. on June 26, the sale would go forward to Unicorp.

The terms of the auction are proposed as requiring a 10 percent cash deposit for any competing bid to be placed into a trust account. Bidding at the auction will commence with the highest qualified bid and continue in increments of not less than $50,000 until all parties have made their final offers. At that time, the highest and best bidder would win and the sale could be approved.

In the filed motion, the attorney for the Trustee argues the sound business justification to go forward with the sale of the estate which contains the $23 million ruling. That ruling was made in appeals court by Judge Steve Merryday, who found that the Association was liable for costs and damages as a result from its role in actions that led to the closing of The Colony Beach and Tennis Resort and the destruction of the business that was managed by Colony founder Murf Klauber and his partnership for more than 40 years.

The Trustee argues to the Judge that all efforts to arrive at a ‘global settlement’ with the Association of Unit Owners has failed. The Trustee added that there are no ongoing operations at The Colony and after four years of litigation, “The Trustee believes it is time to efficiently monetize the assets of his estate.”

The motion filed last week will be heard by Judge May on June 11 in the U.S. Bankruptcy Court in Tampa. It will likely be fought by the Association of Unit Owners and their attorney Jeffrey Warren. The Association is also facing a ruling by Sarasota Circuit Judge Rochelle Curley that was made last month which ordered the Board of Directors of the Association to assess the cost to repair the units and make a plan to assess the Unit Owners to repair The Colony back to a functional state.

Judge Curley found that the Board had neglected its fiduciary duty in its failure to maintain the property. The Association is appealing Judge Curley’s ruling.

 

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1 Response for “Colony Trustee asks Bankruptcy court for June 26 sale of $23 million judgment”

  1. Georgie McFarland says:

    Lawsuit after lawsuit makes for mass confusion and is a great annuity for the lawyer clique. Who’s on first? To fix or not to fix is that the question? Meanwhile while the legal arguments go round and round; the Colony continues to deteriorate and nobody wins this ballgame.

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