UPDATED, Jan. 6, 4:30 p.m.: The partnership behind the Apeiron at the Jockey Club project is in tatters, amid allegations of double-crosses, a loan-to-own scheme and the sabotage of a $20 million deal, according to a recently filed lawsuit in Miami-Dade Circuit Court.
Apeiron Holdings Miami and Apeiron Miami, two shell corporations controlled by developers Muyad “Mo” Abbas and Michael Bedner, are suing partners Asaf Horesh, Zeev Segal and their company Jockey Segal Upland. The complaint also names Doron Arad and his company Pledger Trust Series 28 LLC as defendants.
Jason Koslowe, the attorney representing the Apeiron entities, said his clients faithfully managed the project’s development for five years, but Horesh, Segal and Arad are attempting to force them out without compensation.
The ultra-modern 120-unit project would be built on 13 acres of common grounds at The Jockey Club, which already has three existing condo towers. The development site is located on three parcels at 11119 and 11121 Biscayne Boulevard and 1580 Northeast 111 Street in North Miami.
According to the complaint, the Apeiron entities had negotiated the sale of the three properties for $20 million to EMG Jockey Club LLC, a company that was going to build and manage a proposed marina that is part of the Apeiron project. EMG is managed by Michael Bolchoz, president of marina developer and operator Elite Marinas Group in Palm Beach Gardens.
“Apeiron’s partner Jockey Segal is attempting to use our courts to engage in a loan-to-own scheme to block the fair market sale of Apeiron’s property,” Koslowe said. “We trust the justice system will properly resolve this membership dispute.”
Robert Stok, the lawyer for Horesh, Segal, Arad and their companies, accused Abbas, Bedner and the Apeiron entities of allowing a $10 million loan to go into default and of putting the project in “terrible shape.” In October, Jockey Segal Upland sued the Apeiron entities, Abbas and Bedner to block the sale and foreclose on the $10 million debt, which Arad acquired from the original lender, Romspen Mortgage Limited Partnership from Ontario, Canada.
According to the Apeiron lawsuit, Abbas and Bedner funded approximately $11 million into the project, obtained a full suite of entitlements and permits, prepared architectural plans and secured financing since 2014, when the developers partnered with Horesh, Segal and Arad. In 2017, Apeiron Holdings and Apeiron Miami won litigation filed by two of the three Jockey Club condo owner associations to stop the project from moving forward when Miami-Dade Judge John W. Thornton ruled the developers had the right to build on 14 acres of common areas and take over maintenance of the property. The associations appealed Thornton’s order, which is currently pending. The Jockey Club II also secured a court ruling preventing Apeiron from building on land leased by that association.
The company also paid down more than half of a $21 million mortgage obtained from Romspen, according to the lawsuit.
But a year later, trouble was brewing. The lawsuit states Apeiron became delinquent on the remaining $10 million owed to Romspen. At the end of a loan forbearance period in March 2019, Romspen threatened to foreclose on the loan and Apeiron began searching for alternative forms of financing, the lawsuit alleges. The lender was also “aggressively shopping” the loan and Apeiron feared whoever purchased the debt would quickly move to take the properties, according to the suit.
In September, Apeiron claims it had arms-length negotiations with EMG Jockey Club to sell the development site for an appraised value of $20 million. Apeiron asserts that its legal counsel advised Abbas and Bedner that they did not need a majority vote from the partnership’s members to move forward with the transaction. The lawsuit alleges that Jockey Segal Upland never responded to notices about the potential sale and that Horesh and Segal failed to provide any financing alternatives to stave off foreclosure.
Instead, Arad, who in October joined Jockey Segal as a minority member, offered to match EMG’s purchase price, but at terms less favorable to Apeiron, the lawsuit states. Apeiron decided to move forward with EMG as the buyer.
But unbeknownst to Abbas and Bedner, Arad had bought the $10 million debt from Romspen. Jockey Segal sued Apeiron, Abbas and Bedner on Oct. 16 and won a temporary injunction blocking the sale. After assuring the judge that Arad would not foreclose on the properties to win the injunction, the lawsuit claims, Jockey Segal notified the Apeiron entities on Dec. 5 that it was in default, and demanded full payoff of the $10 million.