Condo owners oppose $2.4 million receiver fee
A former Miami-Dade circuit court judge has incited residents by requesting $2.4 million as payment for his job as court-appointed receiver in the Chapter 11 case of One Bal Harbour Resort and Spa, the Daily Business Review reported.
Jorge J. Perez, the head of the receivership program at McDonalds Hopkins, and a former judge, was appointed receiver of the bankrupt One Bal Harbour project.
Condo owners formalized their discontent in an April 12 filing.
“The receiver and his law firm systematically exploited their appointment as fiduciaries by the state court as a bottomless trough to enable a feeding frenzy to line the pockets of those involved,” Charles M. Tatelbaum, a partner at Hinshaw & Cuberston in Miami, wrote.
Perez will respond in court, the Review reported. U.S. Bankruptcy Judge Robert Mark set an April 30 hearing on Perez’s fees and other matters.
After being sued in state court by the association and hotel investors, the building owner, Bal Harbour-based Elcom Hotel & Spa Inc., filed for bankruptcy protection in January.
Elcom purchased the building four years ago in the bankruptcy case of WCI Communities Inc. for $14 million. The property has 185 condos owned by individuals, 124 hotel rooms owned by investors, and the two groups share the spa, restaurant, pool and other amenities.
There were already construction-related problems when Elcom was sued by the associations representing condo owners and the hotel investors over planned assessment adjustments.
Alleging gross mismanagement and fraud, the associations asked for a receiver to be put in charge of the property.
Perez defended his contribution as receiver, saying there appeared to be little or no effort to financially manage the complex. He brought in high-end hotel operator Benchmark Management Co. to run the resort.
“There was basically no accounting system, something that you would find even in a small business,” Perez reportedly told the newspaper. “You had to start looking check by check by check.” [Daily Business Review] –Emily Schmall