Colony Association's rec lease settlement in jeopardy

Unicorp National Development President Chuck Whittall is making a play for U.S. Bankruptcy Chapter 7 Trustee Douglas Menchise's Colony Beach & Tennis Resort's $2.5 million recreational lease judgment.

Menchise, who already signed an agreement with the Colony Beach & Tennis Resort Association for the judgment and a law firm that's the largest affected creditor in the shuttered resort's bankruptcy case as part of a three-way $600,000 settlement, filed a motion to rescind that agreement. Menchise noted in his Aug. 6 motion to rescind the agreement expired and contained a mutual mistake of fact. 

Whittall announced Friday he's reached a $1.4 million cash settlement agreement with Menchise that acquires the rec lease judgment and provides more cash for Menchise to settle claims. The settlement also releases the liability of all claims involved with the rec lease estate.

Whittall also announced his company has become the largest affected creditor in the bankruptcy case by purchasing the bankruptcy claim of Sarasota law firm Icard Merril for an undisclosed amount. An agreement the association had in place to purchase the Icard Merrill claim expired July 30. Icard Merrill filed an objection to the former association settlement of their claim because the amount listed it was owed was incorrect. 

U.S. Bankruptcy Judge K. Rodney May will review the settlement Unicorp has reached with Menchise 10 a.m. Aug. 28. 

Any future development of the Colony Beach & Tennis Resort must come along with the acquisition of a long-disputed recreational lease settlement that Menchise controls.

Menchise was bringing forward a $600,000 settlement reached with the association to May 10 a.m. Aug. 28. But the settlement offer won’t be presented to May as planned because Menchise filed a motion last week to withdraw that offer.

Colony Beach & Tennis Resort Association President Jay Yablon said the association will fight Menchise's decision at Aug. 28.

“We already signed a three-way agreement with Icard Merrill and Menchise that’s scheduled for approval,” Yablon said. “Behind the scenes, Whittall interfered with that and he’s trying to reach a separate agreement. The association intends to go to court to enforce our agreement because it was signed.”

Contact Kurt Schultheis at  [email protected].