Association makes conversion argument

 

Association makes conversion argument

 

Date: April 21, 2010
by: Kurt Schultheis | City Editor

 
 

Tampa-based U.S. Bankruptcy Judge K. Rodney May heard from a list of witnesses the Colony Beach & Tennis Resort Association brought to the stand Monday, March 19, in an attempt to argue why the judge should convert the resort’s Chapter 11 bankruptcy reorganization filing to a Chapter 7 liquidation.

The association, representing 232 unit owners, wants the case converted in an attempt to remove Colony Chairman and owner Dr. Murray “Murf” Klauber from having control over their units.

On Monday morning, Colony President and General Manager Katie Klauber Moulton took to the stand to answer a variety of property upkeep and financial questions from association attorney Jeffery Warren.

David Karins, owner of Sarasota-based Karins Engineering Group Inc., also testified that the association, as part of its bankruptcy reorganization plan, has not performed repairs and maintenance to the buildings and common areas as proposed. Karins said the association pulled a permit for work in November and has since canceled the contract to repair and replace siding and support posts and make foundation repairs on resort buildings. Painting, waterproofing and other minor repairs were also a part of the contract.

William M. Hitson, founder of the Days Inn hotel chain, also testified that he has signed a letter of intent to take over the duties of Klauber’s general partner role at the resort. Hitson wants to create a new revenue-sharing agreement with unit owners similar to what exists with the Longboat Key Club and Resort and Inn on the Beach unit owners.

Hitson stated that he has developed two similar successful projects in Orlando and Cocoa Beach.

The hearing was continued until Friday, April 23.

The association has yet to complete its argument or make its closing remarks on why the case should be converted. Also Friday, Klauber and Colony lenders David Siegal and Randy Langley are expected to testify why they don’t believe the bankruptcy case should be converted.

All witnesses who testified Monday could be called back to the stand Friday.

May is not expected to rule on the bankruptcy conversion motion for 10 to 14 days after the hearing is complete.

Contact Kurt Schulteis at kschulteis@yourobserver.com.
 

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