Judge May reviews $23 million judgment request today

U.S. Bankruptcy Judge K. Rodney May will review a motion today in his Tampa courtroom that decides the fate of a $23 million judgment against Colony Beach & Tennis Resort unit owners.

Colony trustee William Maloney seeks to sell the judgment to Unicorp National Development for $3.5 million or hold an auction June 26 to determine if anyone is willing to submit a better offer than Unicorp’s. Maloney and Unicorp President Chuck Whittall have already signed a contract for the purchase of the judgment.

Maloney, the Colony Beach & Tennis Resort Chapter 7 trustee who controls a $23 million judgment — which longtime Colony owner Dr. Murray “Murf” Klauber won on appeal against unit owners — doesn’t foresee settlement among Colony parties. 

So in a June 3 motion, the trustee’s legal counsel suggested it’s time to sell the judgment for $3.5 million to an interested party: Orlando-based Unicorp National Development President Chuck Whittall.

Association President Jay Yablon said the association will object to the sale.

If the judgment is sold to a developer, the sale would bring legal and financial risks for Colony owners. 

If Unicorp, for example, buys rights to the judgment, unit owners could be exposed to a $23 million liability that would be assessed at a cost of more than $100,000 per unit owner. 

For more information on today's 2 p.m. hearing, check yourobserver.com this evening for an update and pick up a copy of next week's Longboat Observer.

Contact Kurt Schultheis at [email protected].