U.S. Bankruptcy Judge K. Rodney May entered his sanctions order against Colony Lender LLC and Unicorp National Development Inc. this week.
U.S. Bankruptcy Judge K. Rodney May entered his anticipated sanctions order against Colony Lender LLC and Unicorp National Development Inc. this week.
The May 12 order requires Colony Lender to dismiss within 14 days lawsuits against all Colony unit owners, in which Colony Lender and Unicorp seek more than $5 million in damages for unpaid rent plus interest on a disputed recreational facilities lease. May ruled in March that those letters violated an automatic bankruptcy stay.
May also is requiring Colony Lender LLC principals David Siegal and Randy Langley, along with Unicorp President Chuck Whittall, to write a letter to every unit owner on official company letterhead that includes their names on it, asserting the claims being sought against them are being dismissed.
And five Colony unit owners that sold their units to Unicorp last year for $20,000 apiece after all owners received demand letters in August, telling them they could face millions of dollars in liabilities if they do not sell their units to Unicorp, will have a 30-day opportunity window to get their units back.
Liens placed on Colony units for rent by Colony Lender and Unicorp are required to be removed as part of the pending order.
May already requested an order be drafted by Colony Association Attorney Jeff Warren that includes a cost and damages study to assess what kind of monetary sanctions Colony Lender and Unicorp should be required to pay for its actions. May said both punitive and actual damages unit owners accrued by paying for legal fees associated with the lawsuits will be considered. Punitive damages would be money ordered to pay to make an example of certain Colony Lender actions and actual damages would be assessed for costs and delays unit owners had to endure for the state court lawsuits while they wait for a resort to be developed.
A hearing will be held 10 a.m. June 5 and Judge May still must decide on monetary sanctions for Colony Lender and Unicorp.
May also ruled that Colony Lender has no other claims pending in other bankruptcy estates.
For more information, pick up a copy of next week’s Longboat Observer.
Contact Kurt Schultheis at [email protected].