The Colony Beach & Tennis Resort closed for good Aug. 15, 2010, and five years later, the 18-acre beachfront property at 1620 Gulf of Mexico Drive remains locked up and vacant. Still, the summer brought key court rulings that could help settle significant pieces of the bankruptcy puzzle.
Here’s a cheat sheet on how legal developments unfolded over the summer, as well as answers to the lingering questions you may have about the case.
What’s the biggest development of the summer?
U.S. Bankruptcy Judge K. Rodney May awarded the Chapter 7 Partnership estate — which includes the coveted $23 million judgment against unit owners — to the Colony Beach & Tennis Association Sept. 8, in his Tampa courtroom.
The ruling settles the largest piece of the bankruptcy case, meaning development might happen sooner rather than later. The ruling was key to the association because it means unit owners can bury a judgment developers could use against them to redevelop the resort.
It was the second estate the association acquired in four days that will pay creditors to end the bulk of the six-year bankruptcy case.
Does that mean the Colony will be redeveloped soon?
It depends whom you ask.
According to Colony Beach & Tennis Association President Jay Yablon, the estate acquisitions “mean we are probably two to three years closer to having a redevelopment at the Colony.”
But in late September, Unicorp National Development Inc. filed an appeal asking a U.S Bankruptcy District Court of Appeals judge to overturn the sale of the bankrupt estate. It’s unknown how long it will take for the appeals process to last.
Yablon called the appeal “a delay tactic.”
Why is the Colony Beach & Tennis Resort closed?
U.S. Bankruptcy Judge K. Rodney May converted the Colony’s Chapter 11 bankruptcy reorganization with its unit owners to a Chapter 7 liquidation in August 2010, which ultimately closed the resort.
The rulings forced the Colony to close by dissolving the partnership that ran the Colony (led by Dr. Murray “Murf” Klauber) and converting the Colony from a hotel resort to a condominium association.
What is the town’s current role in the litigation?
Commissioners have discussed the possibility of taking away the 134 nonconforming units in the past, as well condemning the property if the parties don’t reach an agreement. But Mayor Jack Duncan said commissioners no longer have those discussions. Although the town attorney monitors the case, the town is staying out of litigation.
“We’ve learned at this point that all we can do is wait for the legal mess to resolve itself,” Duncan said.