The creditors of the Palm Beach condo-hotel project that was once at the center of South Florida’s largest EB-5 fraud case may be one step closer to getting paid.
A federal appeals court denied an appeal by Wellington developer Glenn Straub to overturn the sale of the Palm House Hotel, according to the Palm Beach Daily News. Straub attempted to buy the bankrupt property at 160 Royal Palm Way in Palm Beach and claims he offered $50 million for the property, but instead a federal court approved the sale to the U.S. affiliate of London + Regional Properties for $40 million earlier this year. The deal has since closed but the funds have been held in escrow.
Straub claims he presented the fairest and best offer for the property, the Palm Beach Daily News reported. Straub said he is seeking the appeals court to re-hear the appeal. The trustee, however, had issues about Straub’s past involvement with the property.
Straub has another ongoing appeal in federal court over a bid he made to buy the property with no cash. Straub claims he holds a defaulted $27.5 million mortgage after he alleged his companies loaned money to the failed EB-5 project.
The former developer of the Palm House Hotel, Robert Matthews, is awaiting sentencing after pleading guilty to criminal fraud charges for bilking EB-5 developers out of millions of dollars. Matthews said he would use the money to redevelop the dilapidated Palm House Hotel into a five-star hotel, but instead used the money to buy a 151-foot yacht named “Alibi” as well as a property in Connecticut. [Palm Beach Daily News] — Keith Larsen