Colony case lingers into November

U.S. Bankruptcy Judge K. Rodney May heard more of the same from Colony Beach & Tennis Resort parties at a hearing this afternoon in Tampa to review settlement progress.

More of the same included pleas from the Colony Beach & Tennis Resort Association to approve a submitted settlement next month, objections from Colony Lender LLC and pleas from Colony Lender for May to allow a sale of all the resort’s assets.

Colony Lender attorney Michael Assaf urged May again to take the case out of Chapter 11 bankruptcy so all of the resort’s assets can be sold.

“Sell everything, sell it all,” said Assaf, who explained it’s the easiest way to get all the pieces of the Colony reassembled as a whole and to get the best price for the assets and property. “Why aren’t we in a liquidation exploring the sale of the assets? Let the Association and the interested developers bid on all of it.”

Colony Lender owns bank loans on Dr. Murray “Murf” Klauber’s property and is seeking to collect on a recent judgment of more than $13 million. Colony Lender already has a foreclosure sale scheduled on Dec. 6 for three acres in the middle of the shuttered resort.

Assaf also asked May to consider that Orlando-based Unicorp National Development Inc. is the appropriate choice as the Colony’s future developer, noting the company is willing to give U.S. bankruptcy trustee William Maloney $2.3 million in cash to pay off creditors that’s available as soon as May approves the offer.

The settlement reached with the Association, Klauber and the trustee, meanwhile, gives the trustee $2.3 million over five years after a list of conditions are met. Those conditions include a vote of the unit owners to approve the settlement and the town’s approval of a future redevelopment project.

Colony Association attorney Jeffery Warren, meanwhile, urged May to set times in November for a settlement confirmation and to hear appeals of the settlement. Warren noted that a signed development agreement between the Association and selected developer JHM Financial Group LLC could occur next week at a public board meeting.

“If other parties had a better plan, they had two years to produce it and haven’t done so until now,” Warren said.

U.S. trustee attorney Jordi Gusso told May that discussions with Colony Lender are ongoing regarding a settlement, although Assaf noted Colony Lender has not had one conversation with the Association regarding a settlement.

May made it known he’s not willing to convert the bankruptcy case for liquidation just yet. He also explained that meaningful settlement talks with Colony Lender must be had for the case to come to any sort of a conclusion.

“A settlement that can maybe be produced from an A-list mediator could bring this case closure,” May said. “If everyone wants me to keep making rulings that can be appealed, we can keep doing that too.”

May and the parties agreed to meet again Oct. 24, Nov. 7 and Nov. 8 to review the submitted settlement and the arguments and objections that come along with it.

For more information, pick up a copy of next week’s Longboat Observer.

Contact Kurt Schultheis at [email protected].