The trustee in charge of the liquidation of lawyer Scott Rothstein’s firm could not halt a Florida state court case over the former South Beach home of the late fashion designer Gianni Versace, Law360 reported.
Bankruptcy Judge Raymond B. Ray allowed tenant 1116 Ocean Drive LLC and mortgage holder VM South Beach LLC to proceed with a lawsuit filed last month. Trustee Herbert Stettin argued that the tenant violated an automatic stay. Restaurateur Barton G., owner of 116 Ocean Drive LLC, denied the allegation in the lawsuit.
The entity said its case is not related to the bankruptcy case of Rothstein Rosenfeldt Adler PA. The suit accused landlord Casa Casuarina LLC and owner Peter Loftin of construction eviction, breach of contract and fraudulent inducement.
“The demands for relief in the complaint of 1116 Ocean Drive reflect the reality that it seeks to adversely affect the effect ownership interests of the trustee in Casa and the property, including the rental payments that it promised to pay to Casa,” Stettin said in his motion, as reported by Law360. “As with the complaint, [VM’s] motion to intervene similarly exhibits an attempt to adversely affect the bankruptcy estate’s interests in the property. The motion to intervene reveals that VM South Beach seeks to obtain rents from Casa’s tenant.”
Rothstein, a convicted Ponzi schemer, invested in the mansion, which has been listed for $75 million, Law360 said.
Last year, Rothstein admitted to funneling millions through his firm to acquire a 9.99 percent stake in the 19,000-square-foot property in 2009 and more to later keep the property running. Casa Casuarina’s majority owner Peter Loftin controlled Luxury Resorts LLC, to which the money was wired. Loftin put the home on the market last June for $125 million, then dropping the asking price to $75 million in May, Law360 said, citing Curbed.
Rothstein received a sentence of 50 years in 2010 for his $1.2 billion Ponzi scheme, the report said. [Law360] – Mark Maurer