Judge May rules on Colony issues

On Wednesday, U.S. Bankruptcy Judge K. Rodney May issued two orders in the Colony case, both of which tilted in favor of the Colony Association.

May sanctioned Colony Lender LLC and Unicorp, the two entities in control of 2.3 acres of recreational land at the resort, $69,628.50 for allegedly violating an automatic bankruptcy stay by suing unit owners over payments for that land. 

Further, May determined that Colony Lender had not acquired the recreational lease associated with the actual real property. Colony Lender had previously sought damages and back rent from unit owners in connection with the rec lease.

“Well it wasn’t surprising to me,” Colony Association President Jay Yablon said of the orders. “We were expecting them, because we felt we were right here.”

In a July 21 memo updating the Longboat Key Town Commission on the status of the litigation surrounding the property, Assistant Town Attorney Kelly Fernandez wrote:

“Other than remaining appeal rights, the vast majority of the litigation involving the Colony property has now been resolved.”

But those awaiting resolution in the 8-year-old legal saga shouldn't celebrate just yet.

Representatives of Colony Lender say they plan to appeal the decision.

“As far as the two rulings go, we believe they are clearly erroneous,” said Colony Lender principal David Siegal. “And we will be appealing both of them to the district judge, as we have in the past.”

Still, the Colony Association’s board of directors is meeting Tuesday to determine whether to forward a development agreement with Unicorp along to unit owners. The two sides would need approval from 80% of owners to proceed.

If approved, the development agreement would include a global settlement of most litigation surrounding the property.

“If unit owners approve the development agreement, the rulings are irrelevant,” Siegal said.

If not, the case would continue through the appeals process.

Unicorp is slated to close on its purchase of Colony Lender’s recreational land Tuesday. Siegal and former Cedars Tennis & Fitness Club Inc. owner Randy Langley formed Colony Lender in 2010, and purchased from Bank of America a mortgage on  the tennis courts, the Colony restaurant, the swimming pool and Klauber’s penthouse office in February of that year. The pair aimed to restore the resort to its former glory.

“I think Colony Lender will be ‘bye-bye’ next week,” Siegal said, which means one less player in the Colony saga.