Unit owners seek stay in lawsuits

Nine Colony Beach & Tennis Resort unit owners and the Colony Beach & Tennis Association are asking the 12th Judicial Circuit Court to stay Colony Lender LLC’s lawsuits against unit owners.

Association attorney Jeffrey Warren filed the motion Oct. 22, asking the court to put Colony Lender’s lawsuits on hold until a bankruptcy judge rules whether Colony Lender has the right to pursue action against unit owners for damages related to a disputed recreational facilities lease.

The suits, filed in October against unit owners, seek $4,594,276.40 for accrued unpaid rent plus interest on the lease for the period of Oct. 29, 2008 through Aug. 15, 2014, plus $525,244.82 in unpaid real estate taxes, interest, and attorney fees. The association argues that Colony Lender owns a 95% interest in the land but not the lease on 2.3 acres of recreational property at the shuttered resort and that the Florida Legislature made such leases illegal in 1975.

Colony Lender purchased overdue bank loans on resort property controlled by longtime Colony owner Dr. Murray “Murf” Klauber, including an 80% interest in loans on the 2.3-acre recreational property, plus a 15% interest in the same property.

It received a judgment of more than $14.3 million in a foreclosure trial last September, which increased by several hundred thousand dollars as interest accrued each month. It placed the winning bid of $15,200,001 in a July auction to become 95% owner of the recreational property.

Meanwhile, U.S. Bankruptcy Judge K. Rodney May is expected to rule Nov. 12, on a motion Chapter 7 Bankruptcy Trustee Douglas Menchise filed seeking sanctions against Colony Lender LLC for its assertions that it controls the recreational facilities lease.

“The state lawsuit should have never been filed, and it is a violation of the stay that was imposed by the bankruptcy court,” said Colony association President Jay Yablon. “In our view, it is sanctionable.”

Warren has stated in court that he believes there are several millions of dollars in damages stemming from Colony Lender’s actions. Colony Lender insists that there was no stay in effect.

Colony Lender LLC principal David Siegal said the motion has “no merit.”

“It’s a bizarre argument to say that a bank forecloses on a mortgage on a piece of property and the tenant contends that the former owner is still the landlord,” he said.

Siegal said Colony Lender will file its response to the motion later this week.