Judge dismisses Bath Club lawsuit against association and two unit owners accused of conspiring against Peebles Corp.

The developer had alleged owners attempted a hostile takeover bid by trying to drive down The Bath Club’s market value

Don Peebles and the Bath Club (Credit: Zilbert)
Don Peebles and the Bath Club (Credit: Zilbert)

In a blow to Peebles Corp., a Miami-Dade judge tossed out a lawsuit brought against two high-profile unit owners and the association at the Bath Club, the historic Miami Beach private club the developer acquired and redeveloped in the early 2000s.

Miami Dade Circuit Judge Beatrice Butchko last month ruled in favor of defendants Mark Penn, Thomas Ireland, the condo and maintenance associations for The Residences at The Bath Club and Rubicon Holdings, granting their request to dismiss the lawsuit filed by Bath Club Entertainment, a management company controlled by Peebles Corp., led by Don Peebles.

Eleanor Barnett, a partner at Waldman Barnett representing Bath Club Entertainment, said her client intends to refile an amended complaint by a Sept. 4 deadline set by Butchko. “The judge wanted more details on certain allegations about the activities we allege are wrongful,” Barnett said. “We will provide them to her and we are confident the amended lawsuit will proceed.”

Todd Legon, a lawyer for Penn and Ireland, said Bath Club Entertainment will likely lose again. “We are certainly pleased and gratified the court granted our motion to dismiss,” Legon said. “We have always believed this complaint has no merit whatsoever.”

Representatives for Rubicon and the attorney for the associations did not respond to messages seeking comment.

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According to the complaint, Penn, a former Clinton administration strategist who now manages a private equity firm, and Thomas Ireland, chairman and CEO of commercial real estate firm the Ireland Companies, allegedly conspired with one another to sabotage Peebles Corp.’s operation of The Bath Club, hoping to buy the former members-only club at a steep discount.

The suit alleges that Penn and Ireland, while serving on the association’s board of directors, spearheaded the effort to disrupt and undermine Peebles’ management of the 5-acre property at 5937 Collins Avenue that includes a 1930s clubhouse, a fitness center, 107 condos, six oceanfront villas and 60 cabanas.

According to the suit, while Peebles expected the club to fetch more than $25 million on the market, Penn and Ireland allegedly conspired with Rubicon to drive down the market value. Peebles rejected one $10 million offer made by Penn and Ireland, and another for the same amount made by Rubicon.

Peebles and the association have filed dueling lawsuits against each other several times between 2007 and 2012. In a previous interview, Legon said the latest complaint by Peebles was an attempt to avoid the financial impact of a court order that required the developer to fulfill food, beverage and cabana obligations to unit owners.