Colony Lender LLC filed an emergency motion this week to delay the auction of a U.S Bankruptcy trustee’s estate scheduled for 2 p.m. June 19 in Tampa.
The motion, though, was denied by U.S. Bankruptcy Judge K. Rodney May on Thursday in his Tampa courtroom and the sale is scheduled to continue next week.
As part of the motion, Colony Lender stipulated it would not oppose the auction if they were allowed to credit bid.
Credit bidding is a right that secured creditors have in bankruptcy sales and auctions, allowing a creditor to bid the full amount of its claim without offering any cash. The right to credit bid, which is listed in the bankruptcy code, gives undersecured creditors the ability to control their collateral when it is worth less than the face amount of their claims.
The Colony Beach & Tennis Resort Association argued the approximately $15 million in unpaid bank loans Colony Lender is due is tied mostly to the recreational property on the site and not to the bankrupt estate.
At the auction, it’s expected that two main groups of developers will bid on the Colony Partnership’s bankrupt estate. Both groups have already offered $2.3 million for the estate. The estate comes with a $23 million judgment ruling against Colony unit owners. The judgment includes the losses and damages owed to longtime Colony owner Dr. Murray “Murf” Klauber’s management entity, known as the Partnership, which is in Chapter 7 bankruptcy for the Colony Beach & Tennis Resort Association’s failure to pay for assessments and repairs to the resort.
Orlando-based Unicorp National Development Inc. President Charles Whittall will bid at the auction.
Another group with ties to the association is also prepared to bid at the auction. That group is made up of Longboat Key-based MW Development Group principal Manfred Welfonder; Sarasota Ritz-Carlton and Concession Golf Club & Residence developer Kevin Daves; and Siggy Levy, who has been involved in many development projects in North America, including numerous condominium properties on Longboat Key and some developments with the Four Seasons Hotel Corp.
May is accepting “higher and better” offers that may come forth before the auction. Those that already have bids in play will get notice of counter bids to make higher offers before the sale occurs.
For more information on next week’s auction, check yourobserver.com for updates.
Contact Kurt Schultheis at [email protected]