Judge hears from both sides in Colony case

U.S. District Judge Steven Merryday didn’t make a ruling in the battle over the shuttered Colony Beach & Tennis Resort at a hearing Thursday in Tampa after hearing arguments from attorneys for longtime resort owner Dr. Murray “Murf” Klauber and the Colony Beach & Tennis Resort Association. But he ended Thursday’s hearing by saying that he faced a “knottier problem” than both parties may realize. He said he believes the case should have remained in Sarasota County court, where local judges are more familiar with condominium law, but instead it ended up in bankruptcy court.

Merryday, who reversed the actions and rulings made by U.S. Bankruptcy Judge K. Rodney May in August 2009, offered his thoughts after hearing from Klauber’s attorney, Charles Bartlett, and Association attorney, Jeffrey Warren.

Bartlett urged the judge not to send the case back to May’s bankruptcy court; he argued that such a decision would essentially be equivalent to “kicking the can down the road.”

Bartlett suggested Merryday could take a “what’s done is done” approach and calculate damages owed by the Association to Klauber — a course that would be simplest, but not the course his client favors. Another approach, favored by Klauber, would be for the judge to restore the Partnership agreement to what it was prior to the association's bankruptcy filing in 2008.

But Warren contended that previous bankruptcy rulings that certified the Association’s reorganization prohibited Merryday from re-establishing the partnership. He argued that the case should go back to May’s bankruptcy court and said that because of past rulings, Merryday’s reversal rulings only allow him to issue judgments in Klauber’s favor for the Association’s failure to make past assessments or recreational lease payments.

Merryday said at the end of the hearing that he does not know how he will rule.

“I haven’t made up my mind yet about anything,” he said. “That’s the reason for this hearing today.”

To read the Colony Association's recommendations regaring the case, click here.

To read the Colony Partnership's recommendations regarding the case, click here.

For more information, pick up an Aug. 18 copy of the Longboat Observer.

Contact Robin Hartill at [email protected].