Longtime Colony Beach & Tennis Resort owner Dr. Murray “Murf” Klauber placed three of his Colony-owned companies into Chapter 11 bankruptcy last week, stalling a Colony Lender LLC foreclosure hearing that was originally slated to be heard this morning in a Sarasota Clerk of the Court courtroom.
Resort Management Inc., Colony Inc. and Colony Beach & Tennis Inc. were placed into bankruptcy Friday afternoon. The companies represent collateral on a $13 million debt owed to Colony Lender principals David Siegal and Randy Langley.
“It was not unexpected,” Siegal said. “It’s the last thing Dr. Klauber can do to try and stall our foreclosure.”
Siegal said he is preparing an application for the Tampa-based U.S. Middle District Court of Florida Bankruptcy Court to revert the Chapter 11 filing to a Chapter 7 liquidation bankruptcy.
“The entities have no business being a Chapter 11 filing because they do no business and no reorganization of the companies are needed,” Siegal said.
If successful, Siegal said the conversion to a Chapter 7 bankruptcy could get Colony Lender’s Sarasota foreclosure back on track in a local courtroom by March at the latest.
Colony Lender is attempting to foreclose on the approximately $13 million owed to them, which includes taxes, interest and the principal of the loans Colony Lender acquired.
Klauber declined comment and said he’s focusing more on getting the Colony back on track than dealing with a foreclosure hearing.
The Colony Beach & Tennis Resort Association, meanwhile, is watching the Colony Lender foreclosure closely because it’s anticipated a foreclosure could speed up a settlement. Currently, the pending foreclosure doesn’t allow Klauber to deliver clear titles to any properties that sit in the middle of the resort as part of any proposed settlement because of the foreclosure proceedings.
Contact Kurt Schultheis at email@example.com.