U.S. District Bankruptcy Judge Steven D. Merryday canceled the auction for the Colony Beach & Tennis Resort’s bankrupt Partnership estate late Wednesday afternoon, according to court filings and information presented at a bankruptcy hearing Thursday in Tampa.
Colony Lender LLC filed an emergency appeal with Merryday earlier this week to overturn U.S. Bankruptcy Judge K. Rodney May’s ruling to hold the auction today.
That auction had three key players vying to own one piece of a complicated resort bankruptcy puzzle.
Ocean Properties Ltd. put in an offer at 3:59 p.m. Tuesday — one minute before bids were set to close for the bankrupt Colony Beach & Tennis Resort Partnership estate — and had the winning bid at $2.45 million.
If Ocean Properties ends up winning the auction whenever it’s rescheduled, it will own a stake in the Colony. And that would set the stage for the company to potentially own its third resort on Longboat Key.
Ocean Properties already owns the former Longboat Key Hilton Beachfront Resort and the Longboat Key Club. Plans are in the works to renovate both of those tourism properties.
Two other developers put in offers for the estate.
Orlando-based Unicorp National Development Inc. President Charles Whittall put in an offer for $2.3 million. Colony unit owner and developer Andy Adams put in an offer for $1 million.
Merryday’s order, though, freezes an auction for the Partnership estate or any other auction U.S. Bankruptcy Trustee William Maloney can hold for the foreseeable future in an attempt to collect money for Colony creditors.
Merryday’s order requests May rule on whether Colony Lender is entitled to a $3.8 million secured claim against the Partnership. The Colony Beach & Tennis Resort Association argues Colony Lender doesn’t have a secured claim it can use to collect that money from the auction.
May scheduled a July 7 hearing date to discuss the Colony Lender secured claim issue. It’s anticipated it could take several hearings before May can rule on the issue.
For more information, pick up a copy of next week’s Longboat Observer.
Contact Kurt Schultheis at firstname.lastname@example.org.