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Longboat Key Wednesday, Jun. 18, 2014 3 years ago

Developers vie for piece of Colony puzzle Thursday

by: Kurt Schultheis Senior Editor

Colony Lender LLC filed an emergency motion last week to delay the auction of a Colony Partnership bankrupt estate, scheduled for 2 p.m. June 19, in Tampa.

However, U.S. Bankruptcy Judge K. Rodney May denied the motion June 12, in his Tampa courtroom, and the sale is scheduled to continue Thursday.

As part of the motion, Colony Lender stipulated it would not oppose the auction if it were allowed to credit bid.

Credit bidding is a right that secured creditors have in bankruptcy sales and auctions that allows them to bid the full amount of their claim without offering any cash. The right to credit bid, which is listed in the bankruptcy code, gives undersecured creditors the ability to control their collateral when it is worth less than the face value of their claims.

The Colony Beach & Tennis Resort Association argued the approximately $15 million in unpaid bank loans Colony Lender is due is tied mostly to the recreational property on the site and not to the bankrupt estate.

At the auction, it’s expected that two main groups of developers will bid on the Colony Partnership’s estate. Both groups have each already offered $2.3 million for the estate. The estate comes with a $23 million judgment ruling against Colony unit owners. The judgment includes the losses and damages owed to longtime Colony owner Dr. Murray “Murf” Klauber’s management entity, known as the Partnership, which is in Chapter 7 bankruptcy for the association’s failure to pay for assessments and repairs to the resort.

Orlando-based Unicorp National Development Inc. President Charles Whittall will bid at the auction.
Another group with ties to the association is also prepared to bid at the auction. That group is made up of Longboat Key-based MW Development Group principal Manfred Welfonder; Sarasota Ritz-Carlton and Concession Golf Club & Residence developer Kevin Daves; and Siggy Levy, who has been involved in many development projects in North America, including numerous condominium properties on Longboat Key and some developments with the Four Seasons Hotel Corp.

May is accepting “higher and better” offers that may come forth before the auction. Those that already have bids in play will receive notice of counterbids to make higher offers before the sale occurs.

For more information on the sale of the estate, check for updates Thursday evening.

Contact Kurt Schultheis at [email protected]


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