Three Dr. Murray “Murf” Klauber-owned entities filed a “Global Compromise and settlement” Aug. 26, for Colony Beach & Tennis Resort parties with the Tampa-based U.S. Bankruptcy Court’s Middle District of Florida.
There’s only one problem. The settlement is not signed by any of the parties. And where dollar signs and numbers should exist, there, instead, are black marker redacted lines.
When reached for comment Aug. 30, several Colony parties insisted negotiations are ongoing and could be finished soon — possibly this week.
Longtime Colony General Manager Katie Klauber Moulton said that a bankruptcy hearing scheduled for Thursday in Tampa to review the reorganization plan could possibly be the venue used to announce the signed agreement.
“We are absolutely making progress and are hopeful we will have a signed agreement soon,” Moulton said. “It’s been agreed to in theory by some of the parties.”
“Some of the parties” are the key words in that statement, though, according to Colony Lender LLC principal David Siegal.
Colony Lender has filed a secured interest/claim for Colony Klauber-owned entities totaling $13,612,775.71. Not only does Siegal still call the submittal of the revised settlement plan “not a legitimate one without any numbers attached to it,” but he also said the Colony Beach & Tennis Resort’s development partner, JHM Financial Group LLC, has not contacted Colony Lender. JHM has been given permission to act on the Colony Beach & Tennis Resort Association’s behalf to reach settlements with affected parties.
“I haven’t gotten one phone call or one email regarding a settlement,” Siegal said. “As far as I’m concerned, what was filed in court means nothing.”
Apparently the U.S. trustee assigned to the case agrees with Siegal’s assessment.
On Aug. 30, acting U.S. Trustee Guy Gebhardt objected to the amended plan for reorganization filed last week in a three-page motion, noting that “dollar figures have been redacted … and terms and conditions have not yet been reached.”
Three Klauber-owned entities — Colony Beach & Tennis Club Inc., Colony Beach Inc. and Resorts Management Inc. — initially filed the debtors’ reorganization plan April 30. The three debtors filed for Chapter 11 bankruptcy Jan. 11, after Colony Lender, which owns bank loans totaling more than $13 million on the Klauber entities and is waiting to be paid, filed a foreclosure action. Because the bankruptcy cases were filed prior to Colony Lender’s scheduled trial, the debtor’s assets have been preserved while a reorganization plan was created.
“The debtors intend to enter into a Global Compromise and settlement with the Association, the Partnership Trustee and the Klauber parties to resolve all outstanding litigation issues and disputes with such parties,” the reorganization plan states. “The resolution of such issues is intended to place, directly or indirectly, all strategic assets located at, related to or needed in connection with the successful operation of the resort in the hands of one party so that the resort can be returned to a minimum four star-resort level. Creditors will be paid, satisfied or released consistent with the Global Compromise.”
Colony Association President Jay Yablon said neither he nor JHM officials could comment on the settlement discussions, but said “negotiations are ongoing.”
“From my standpoint, there has been a lot of back and forth to structure a settlement,” Yablon said. “The numbers are redacted for a reason, and those numbers may not become public anytime soon, even after an agreement is signed.”
Siegal, meanwhile, is still pursuing his foreclosure action on the debt owed to Colony Lender, both in a Tampa bankruptcy court and in a 12th Judicial Circuit courtroom.
Last week, Colony Lender made its case in Sarasota for why it’s owed its money, and a judge will render his decision, possibly this week, as to what that exact dollar amount should be. On Thursday, Colony Lender has its own bankruptcy hearing in Tampa to see if a U.S. bankruptcy judge will lift the stay afforded to the Klauber-owned entities and allow its foreclosure sale to occur.
Asked if Colony Lender has been contacted for settlement discussions yet, Yablon said, “We are dealing with settlements one at a time. The dispute at the Colony started between the Klabuer family and the Association. Those are the parties that need to take the first step toward ending the dispute. Once that dispute is settled, we will wake up the next morning and see what the world looks like then.”
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- Colony Lender most likely will get the foreclosure stay lifted in Bankruptcy Court so that the foreclosure on Klauber's assets can continue, wiping out any potential judgement that Klauber might receive from the Colony Association as there will most likely be a deficiency judgement issued against Klauber when all the dust settles. Colony Lender will then step into the shoes of the Klauber judgement which will then be appealed by the Colony Association of homeowners. Further litigation will then issue and the Colony property will still remain fallow unless the Town of Longboat Key acts to discontinue the grandfathered use of 237 units which would help to get Colony Lender to relinquish some of that pot of gold at the end of the rainbow.
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