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
Eastside Ridge rendering

SPV Realty sues city of Miami to force vote on Eastside Ridge

A conceptual rendering and Lon Tabatchnick

Margaritaville developer plans another Hollywood hotel despite opposition

Rendering of The Markers Grove Isle

Grove Isle developers face new lawsuit over proposed project

Orangebrook Mobile Home Estates and Carlyle Group co-CEOs Kewsong Lee and Glenn A. Youngkin (Credit: Google Maps, Carlyle Group)

Private equity giant scoops up mobile home park in Hollywood

Brickell Flatiron (Photo Credit: Golden Dusk Photography)

Brickell Flatiron retail space closes for $22.5M amid lawsuit

From left: James Grage, Matthew Elliott, and Marc Hameroff, with the home

Fitness expert wants to shed his Hollywood home via auction

Parkline at MiamiCentral (Credit: Suffolk, iStock)

Suffolk fights back against developer over MiamiCentral delays

Jared Galbut and Keith Menin are majority owners of Bodega Taqueria y Tequila  

Holy guacamole: Jared Galbut and Keith Menin sued over South Beach taco bar and nearby pizzeria

arrow_forward_ios