Judge recommends damages for Colony partnership

U.S. District Judge Steven D. Merryday issued three separate rulings Wednesday that longtime Colony Beach & Tennis Resort owner Dr. Murray “Murf” Klauber and his daughter, Katie Moulton, hailed as a “great legal victory.”

In rulings, Merryday directed a bankruptcy court to decide whether the Colony Beach & Tennis Association should return possession of units to the partnership that ran the resort and recommend that the partnership receive damages of $7,751,470 or recommend an award of $20,646,312 for the Partnership with no return of units — amounts based on two damage scenarios presented by Klauber’s expert, Dr. Henry Fishkind. Merryday also allowed the bankruptcy court to consider again the Association’s counterclaims for damages against the partnership.

The judge also remanded the dispute over a recreational lease, which previously allowed unit owners to use the tennis courts when the resort was operating, to bankruptcy court to recommend an amount of damages owed to Klauber and other lessors. But the ruling stated that the bankruptcy court “should not hear argument on either mitigation or offset, for which the Association’s opportunity to argue has passed.”
Merryday also ordered both parties to mediation in a conference that must take place on or before Dec. 15.

Association President Jay Yablon did not return a phone call seeking comment Thursday afternoon.
Klauber and Moulton issued a joint statement to the Longboat Observer:

“We are very pleased with the rulings from Judge Merryday, as the results are entirely consistent with what our superb legal team led by Charles Bartlett argued for from the inception of this matter. For more than five years, we have endured continuous filings of erroneous claims against us, which was not only painful for us personally and professionally, but also caused the closure of Longboat Key’s most iconic, renowned and beloved resort. It is hard to celebrate this great legal victory when The Colony sits idle, vacant and deteriorating but, with Judge Merryday’s directive for the parties to enter into mediation before Dec. 15, we are hopeful that the unit owners will finally grasp the significance of the court's rulings and that a swift resolution will finally be reached, so that work can begin to restore The Colony to the luxury resort we proudly established and guided for 40 years.”

Bartlett did not return a phone call seeking comment Thursday afternoon.

Colony Association attorney Jeffrey Warren said the rulings were expected based on Merryday’s July rulings in which he ruled in favor of Klauber in his appeal of the actions and rulings made by U.S. Bankruptcy Court Judge K. Rodney May. Merryday’s latest rulings allow the Association to appeal their case to the 11th Circuit U.S. Court of Appeals. But he said that he and Bartlett have already discussed setting up mediation — a course that Warren believes is most likely to end in resolution.

“My hope is that we won’t need to have the courts resolve these issues,” Warren said.

Warren estimated that litigation could take another three to five years. He expressed hope that with the Association’s recent selection of Club Holdings LLC to redevelop the Colony, discussions could move forward.

For more information, pick up an Oct. 20 copy of the Longboat Observer.

|Contact Robin Hartill at [email protected].