Both sides hope for resolution in Colony Resort mediation

Could resolution of the many legal issues surrounding the shuttered Colony Beach & Tennis Resort be just days away?

Individuals on both sides of the battle are optimistic.

A mediation conference ordered by U.S. District Judge Steven D. Merryday is scheduled for Saturday, Nov. 12.

“We have targeted Nov. 12 as the deadline to reach agreement with these parties on an amicable resolution of the myriad of issues,” wrote Jay Yablon, board president of the Colony Beach & Tennis Association, in an Oct. 27 email to unit owners.

In his email, Yablon wrote that Club Holdings LLC, the Broomfield, Colo.,-based company the board recommended in September to redevelop the Colony, has made separate, confidential proposals to the entities controlled by longtime Colony owner Dr. Murray “Murf” Klauber and their secured creditor, Colony Lender LLC.

Katie Moulton, Klauber’s daughter and longtime president and general manager of the Colony, also expressed optimism about the conference.

“We’re very positive,” she said. “We’re looking for a productive day, and we’re hopeful that we can find a place that is comfortable to all of the parties.”

She said that Merryday’s recent rulings that directed a bankruptcy court to determine damages for the Partnership that ran the Colony made negotiations more likely to move forward.

“With the judge monetizing damages, there is more definitive material to be negotiating with,” Moulton said. “I think before things were undefined.”

But not everyone is feeling optimistic about mediation.

David Siegal, principal of Colony Lender LLC, which purchased a bank note owned by Klauber and the Colony and which by Dec. 31 will reach approximately $12.2 million in value with accrued interest, along with a 15% in the Colony’s recreational/resort property, said that he is concerned by talk among Colony unit owners about a potential teardown.

“Once I hear ‘scrape’ and I hear ‘large buildings facing the ocean,’ it’s not the Colony anymore,” Siegal said.

Siegal said that he and his business partner, Randy Langley, will attend the Nov. 12 meeting at the request of Klauber, although he stressed that his role is that of a lender and partial owner of the recreational/resort property. But he said that he believed a teardown would result in further legal challenges — for unit owners, Klauber and Colony Lender.

Yablon referred questions about whether plans involve a teardown to an Aug. 6 press release he wrote when the board narrowed proposals down to a pool of four. The release states: “These remaining four proposals now include options to both restore and to completely rebuild The Colony.”