Colony settlement extension granted

 

Colony settlement extension granted

 

Date: September 5, 2013
by: Kurt Schultheis | Managing Editor

 
 

 

 

Those anticipating a settlement announcement to the Colony Beach & Tennis Resort saga in a Tampa-based U.S. Bankruptcy Court Middle District of Florida courtroom Thursday afternoon left disappointed.

And no one was more disappointed than U.S. Bankruptcy Judge K. Rodney May.

Three Dr. Murray “Murf” Klauber-owned entities filed a revised “Global Compromise and settlement” Aug. 26 for Colony Beach & Tennis Resort parties that Judge May reviewed Thursday.

But the settlement contained no signatures and no dollar amounts. Colony Beach & Tennis Resort Association attorneys and a bankruptcy trustee attorney said a signed deal is imminent, but explained they needed at least another month to produce it.

The news frustrated Judge May, who said Colony parties have 21 days to submit a signed settlement agreement to his office. Then, the parties will meet again Oct. 5 in May’s courtroom to review it.

“I want to see a deal,” Judge May said. “I’m looking for this to be wrapped up in a bow and sent to the unit owners for their approval.”

Unit owners at the Colony must approve any settlement agreement by a 75% majority vote. That unit owner vote process will take at least 60 days to complete once a settlement is signed. That process could surpass a Longboat Key Town Commission deadline of Dec. 31 that's been issued to preserve grandfathered tourism uses on the resort's site. 

Leading up to the hearing, Colony Lender LLC principal David Siegal made it known he was never contacted as part of the “Global Compromise and settlement,” even though Colony Lender has a secured interest/claim for Colony Klauber-owned entities totaling $13,612,775.71. That amounts to more than three acres of recreational land in the middle of the 18-acre shuttered resort and an interest in a Recreational Lease that’s still in the midst of a legal dispute.

Last week, Colony Lender made its case in a 12th Judicial Circuit courtroom for why it’s owed its money. On Wednesday, a Sarasota judge entered a final judgment of $14,350,337.07 that Colony Lender is due.

Colony Lender attorney Michael Assaf confirmed Thursday Colony Lender has not been a part of the settlement talks; several times he urged Judge May to lift the stay on Colony Lender’s foreclosure sale in Sarasota now that an amount due has been set.

Judge May was sympathetic to Colony Lender’s pleas, lifting the stay that prevented a foreclosure sale. However, Judge May’s order prevents a sale from being scheduled until Dec. 5 at the earliest, in the hopes Colony Lender will be included in the settlement.

Both Association and Colony attorneys made it clear that if an agreement cannot be reached with Colony Lender, the parties will agree to surrender the three-plus acres of property.

For more information on Thursday's hearing, pick up a copy of the Sept. 12 Longboat Observer.

Contact Kurt Schultheis at kschultheis@yourobserver.com.

 

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