Embattled Costa Hollywood Resort files for bankruptcy

The filing comes five months after Madison Realty Capital filed a $41M foreclosure lawsuit against the development group

TRD MIAMI /
Sep.September 25, 2019 02:30 PM
Moses Bensusan and Costa Hollywood Resort (Credit: Wikipedia)

Moses Bensusan and Costa Hollywood Resort (Credit: Wikipedia)

The troubled Costa Hollywood Resort in Hollywood Beach filed for Chapter 11 bankruptcy protection five months after its lender sought to foreclose on the condo-hotel.

The bankruptcy filing marks the latest challenge for the 326-unit project at 777 North Ocean Drive that opened in October.

New York-based Madison Realty Capital lent $70 million to the development group in 2016. In April, the lender filed a foreclosure suit against the development group and its principal, Moses Bensusan, alleging the group was in default of $41 million.

As part of its foreclosure suit, Madison Realty is trying to seize 52 unsold units and the common area of the condo-hotel.

Peter Russin, an attorney who represents the development group in the bankruptcy, did not immediately respond to a request for comment.

According to the lawsuit, Costa Hollywood Property Owner defaulted on the loan from Madison Realty in April 2017, but the lender entered a forbearance agreement and extended the term of the loan.

The bankruptcy case was filed in a U.S. Bankruptcy Court in Fort Lauderdale last Thursday. The filings show the development group has between $50 million to $100 million in assets and liabilities. The South Florida Business Journal first reported the news.

Construction at the development started in 2013, and the developer began marketing the condos to investors in South America and Argentina.

The foreclosure filing is significant because it could signal growing indicators of distress in South Florida’s real estate market. These indicators include an increase in residential home foreclosures and in vulture funds raising money.

Madison Realty Capital said it has completed more than $10 billion in debt and equity transactions since it was founded in 2004. It is increasing its presence in South Florida. The company provided a $225 million construction loan for The Residences at Mandarin Oriental in Boca Raton in July.


Related Articles

arrow_forward_ios
1515 Sunset Drive and Facundo Bacardi

Bacardi-owned company sues construction firm for defects and delays at Coral Gables office development

30 Indian Creek Island Road and Shlomo Alexander

The Alexander Group allegedly mismanaged and then refused to complete Indian Creek Island mansion: lawsuit

Power struggle between Fisher Island association’s directors ignites lawsuit

Echo Brickell and PMG principal Ryan Shear

Construction of Echo Brickell allegedly damaged neighboring condo building: lawsuit

Miami Beach Mayor Dan Gelber and Natalie Nichols home at 1531 Stillwater Drive (Credit: Getty Images)

Miami-Dade judge strikes down Miami Beach short-term rental ban

Jeffrey Soffer and the Diplomat Beach Resort (Credit: Getty Images)

Jeffrey Soffer in talks to buy 1,000-room Diplomat Beach Resort for under $1B: report

ADF lawyer Stuart Sobel and Virgin MiamiCentral

Virgin MiamiCentral station developer and builder to pay $10.5M settlement

Left to right: Debbie Orshefsky, Seth Bour, Vivian Dimond, Peter Flint, Tim Wheat and Chip Abele

Hollywood attracts developers but lacks new office space: panel

arrow_forward_ios