Colony unit owners will vote on settlement assessment

Colony Beach & Tennis Resort unit owners will decide in August whether they want to assess themselves an extra $15,000 per unit in the coming year to pay for settlement cash used to end legal disputes that began in 2007.

That’s because a special assessment that raises more than $3.5 million in settlement cash to bid on a $23 million judgment, which U.S. Bankruptcy Trustee William Maloney is seeking to sell at a September auction, rests with the owners of the resort's 237 units.

Colony Beach & Tennis Resort Association President Jay Yablon told the Longboat Observer the association board approved two assessments July 14.

The special assessment of $15,000, which requires a vote of the unit owners in August, will raise approximately $3,555,000 to pay for a loan from unit owner and developer Andy Adams. That money will be used to make an offer on Maloney’s $23 million judgment Sept. 8, in U.S. Bankruptcy Judge K. Rodney May’s Tampa-based courtroom. Bids for the auction are due July 30.

To approve the special assessment, owners of 119 units — 51% of the ownership — must approve the assessment.

Yablon said he believes unit owners will approve the assessment, noting that Adams owns approximately 70 units and is in favor of raising funds to settle legal disputes.

If the special assessment is approved and unit owners fail to pay $15,000, liens will be placed on individual units. Owners will also have the option to pay the assessment on a quarterly basis that comes along with 7% interest.

“For the first time, the association is coming to the table with real cash in hand,” Yablon said.

“We have finally taken the steps required to raise the cash to put us in the position of settling the disputes."

— Colony Beach & Tennis Resort Association President Jay Yablon

Yablon said for years the association had the mindset that it was a nonprofit corporation that didn’t have the cash on hand needed to settle legal disputes. That mindset came along with past failed deals the association signed with developers who promised to put up the cash to settle disputes and resurrect the property.

“We have finally taken the steps required to raise the cash to put us in the position of settling the disputes,” Yablon said. “We’re not relying on an outside party to put up the cash any longer.”

The other assessment approved July 14 was an annual budget that assesses $9,800 per unit to raise $2,322,600. That money will be used to pay for routine operating expenses, litigation, property insurance and a proposed settlement of approximately $600,000 the association has reached with U.S. Bankruptcy Chapter 7 Trustee Douglas Menchise, who controls everything regarding the rec lease and the associated judgment for $2.5 million.

May will review that settlement in his courtroom on Aug. 28. Colony Lender opposes the settlement because it believes the recreational land it owns came with the rec lease and the $2.5 million judgment it can use to assess unit owners.