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Longboat Key Sunday, Dec. 6, 2009 5 years ago

Colony will reopen this month

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by: Kurt Schultheis Managing Editor

The Colony Beach & Tennis Resort hotel will again be open for business.

Tampa-based U.S. Bankruptcy Court Middle District of Florida Judge K. Rodney May approved the re-opening of approximately 100 rooms in suites in the six buildings closest to the beach last week.

The judge also approved a $175,000 loan Colony Chairman and Owner Dr. Murray “Murf” Klauber has paid to the resort partnership to assist in the resort’s re-opening, the hiring and training of approximately 40 employees, the deposits needed to keep utilities running and the materials needed to advertise the opening.
The Colony is re-opening three months after it suspended hotel operations.

Colony President and General Manager Katie Moulton announced Sunday, Dec. 6 that the resort will re-open Dec. 18 and is already taking reservations.

“We are very excited, but we have a lot of work ahead of us,” Moulton said. “The re-opening is appropriate because it’s desperately important for us to meet the obligations of our creditors by having a functional business capable of being profitable. We need to chip away at the obligations we owe our creditors.”
A list of creditors the Colony filed in bankruptcy court earlier this year reveal that the hotel’s operating corporation owes approximately $1 million to the 20 largest unsecured creditors. Thousands of dollars are also owed to several other creditors listed in the bankruptcy filing.

In September, Klauber and Moulton announced that hotel operations would be suspended in the midst of the hotel’s 40th year in business, because the condominium unit owner association’s board failed to assess unit owners to fund operation expenses and repairs to the property. The resort houses 237 individual condominium units on an 18-acre site.

Two weeks later on Oct. 5, the Colony’s hotel operating entity filed for Chapter 11 bankruptcy, in the same bankruptcy court that ruled the association’s board does not have to assess unit owners $14.1 million in resort-repair costs.

Foreclosure proceedings, in the meantime, have been frozen because of the bankruptcy filing. Bank of America filed a foreclosure suit in Sarasota County this April against Klauber and seven of his resort corporations, alleging they have defaulted on three loans whose outstanding amounts total $8.02 million.

The resort was also issued two tax warrants in October, in which the Florida Department of Revenue claims Klauber owes approximately $200,000 in taxes and sales revenue.

Moulton said she and her father continue to work with investors to implement a plan that will protect the long-term viability of the resort, while May works to come up with a reorganization plan that will take more than a year to complete.

As part of the re-opening, the restaurant will resume its daily lunch and dinner service.

 “We appreciate the generous outpouring of communit-and-industry support as we worked expeditiously to resume hotel operations, and I wish to apologize again to our business partners and displaced guests and employees who were caught in our sudden suspension of operations and reorganization of the resort,” said Colony Chairman and owner Dr. Murray “Murf” Klauber in a statement.   

Colony Association Board Vice President Jay Yablon told The Longboat Observer the association does not object to the resort’s re-opening.

But the feud between the two groups continues to simmer in Colony bankruptcy proceedings.

In federal bankruptcy filings, the association urged May to monitor Klauber’s $175,000 loan closely and supervise any repayment plan. The association also submitted an exhibit Dec. 2, which reveals that Sarasota-based Karins Engineering Group Inc. presented a report to the association in November that shows widespread termite infestation was found in all the buildings and that further investigation of the buildings needed to be performed. Town building official John Fernandez said an inspection of the buildings will be made prior to the reopening.

Contact Kurt Schultheis at kschultheis@yourobserver.com.
 

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