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Colony appeals filed

STEVE REID
Editor & Publisher
sreid@lbknews.com

The Colony court wrangling carries on.

Unicorp has filed two appeals in State Court this week asking to overturn the Sept. 15 sale of the bankrupt estate containing the $23 million judgment to the Association of Unit Owners as well as a request for injunctive relief to preclude any further actions by the Colony Association Board of Directors.

The Appeal centers on a foundational argument that the Association Board is and has over the past years acted without authority and have ignored the mandate of holding elections and following its by-laws.

The appeal refers to the Association Board as a “Rogue Board” and asks the court to set aside any and all actions taken by the board including the recent acquisition of the bankrupt Colony estates.

The appeal states, “All of the officers and directors of the Association were elected to their respective positions more than three years ago. Since that time, the Association has not advertised for, much less held, elections for the board.”

Unicorp asserts that The Colony board has failed to give proper notice for its meetings as well.

In the appeal, Unicorp writes that the Association Board plans to hold a meeting on Sept. 29 to “ram through a proposal” to purchase real property, judgments , as well as go into debt to Andy Adams to accomplish the transactions. The appeal contends that state law requires 100% of the unit owners to consent to the acquisition of property or to expand the common elements.

The appeal asks the court to:

• Prevent the board from entering into any contracts or agreements until appropriate owner vote

• Void all acts of the board including the agreement with the bankrupt trustee in Judge May’s Courtroom to purchase assets.

• Appoint a receiver to assume all Board actions and responsibilities.

• Require the board to obtain approval of all unit owners before expanding the common elements and property.

• Enter a judgment for damages and attorney fees and court costs against the Association board.

 

On Sept 15, the Chapter 7 Colony Estate containing a critical $23 million judgment against unit owners was sold to The Association of Unit Owners extinguishing an outstanding threat against their interests. This is but one of the actions the appeal is asking to set aside.

U.S. Bankruptcy Judge Rodney May approved the settlement that pledged $2.5 million in cash to pay the outstanding creditors along with an additional $500,000 to be escrowed for any additional claims. There were higher bids, specifically made by Unicorp for $4.5 million, but the Judge stated that The Association’s offer was superior in that it paid all of the creditors and The Association additionally agreed to set aside what it stated was up to $30 million in claims it could litigate against the Estate. The Association said it was borrowing money from Andy Adams on behalf of unit owners to resolve the litigation. The Unicorp appeal challenges the sale of the estate as well as the ability of the board to acquire the asset6s as well as to encumber debt.

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