Partnership gone wrong? Receiver takes over Miami Beach hotel following alleged hostile takeover by an ex-partner

UPDATED, Aug. 13, 9:25 a.m.: A nasty breakup between the owners of Miami Beach’s Hotel Greystone has left the Art Deco property shuttered for more than a year, according to a recent lawsuit.

A Miami-Dade Circuit Court judge appointed a receiver to assume control of the hotel as the messy allegations by James Vosotas against his ex-business partner Branden Muhl are sorted out.

Vosotas and Vos Hospitality, his Boca Raton-based boutique hotel development company, are suing Muhl and a group of related entities for civil theft and unjust enrichment, among other counts. Muhl is the CEO of Mahaska, a national food and beverage company based in Oskaloosa, Iowa.

The 92-room Hotel Greystone at 1920 Collins Avenue, across the street from the Setai Miami Beach, is valued at more than $70 million, according to the lawsuit.

Vos Hospitality purchased the historic property in 2012 for $7.5 million and later brought Muhl in as a partner.

Vosotas and Muhl completed a nearly four-year renovation and reopened Greystone as an adults-only hotel early last year. The hotel’s amenities include a 135-seat restaurant and lounge, a 6,000-square-foot rooftop pool and bar, eight private terraces with Jacuzzis and a speakeasy lounge in the basement.

Two months later, Hotel Greystone closed due to local emergency measures meant to slow down the spread of Covid-19.

In the lawsuit, Vosotas accuses Muhl of purposely keeping Hotel Greystone padlocked even after most pandemic-related business restrictions were lifted last June. Vosotas said it was part of Muhl’s “unlawful and premeditated scheme” meant to “strong–arm his business partner out of his business opportunity of a lifetime.”

It’s a business rift for two longtime friends. The pair became friends in college and Muhl was a groomsman at Vosotas’ wedding, according to the lawsuit.

Vosotas’ complaint calls Muhl a “super-rich, trust fund baby” with no hotel experience who allegedly “became blinded by greed and has used every ounce of his economic power and deep pockets to wrongfully attempt to leverage James out of the picture.”

“Through behavior that can only be described as predatory and back-stabbing, Muhl sought to benefit from the fruits of James’ labor,” the lawsuit continues.

Vosotas and his lawyer William Clayton declined to comment. Muhl did not respond to phone messages requesting comment. Todd Levine, the attorney representing Muhl and his companies, said the lawsuit and the personal attack on his client are without merit.

“We believe the plaintiffs have another agenda that will be revealed over the course of the litigation,” Levine said. “The hotel is being run by a respectable, very professional operator and even the receiver would corroborate what I am saying.”

Levine said Hotel Greystone will reopen next month and that Vosotas no longer has an ownership interest in the property. He also noted that the judge appointed the receiver before Muhl and his companies were served and before he was able to retain legal representation.

“My clients didn’t get their day in court,” Levine said. “Once the court does hear our position, we believe the judge will vacate the receivership order.”

According to the lawsuit, Muhl began plotting to double-cross Vosotas in 2019 when one of his defendant entities, BBM3 LLC, purchased a $36 million loan from a previous lender, the Moinian Group. The mortgage was provided to Greystone Holdco, the business partners’ hotel operating company. Vosotas alleges Muhl’s purchase of the loan was fraudulent and created a cycle within the corporate structure in which the loan payments were funneled back to Muhl.

To assure Vosotas that the deal was in their best interest, Muhl allegedly promised that their holding company would initially pay a 5 percent interest rate and then have it lowered to 2.5 percent. Muhl also allegedly told Vosotas that it would give them more freedom in withdrawing loan advances and speed up the hotel’s completion, the lawsuit states.

Instead, without notice or justification, Muhl jacked up the rate to 16.75 percent and subsequently filed a foreclosure action against Vosotas in New York City in March, the complaint alleges. At the same time, Muhl blocked any attempt to refinance the loan, recapitalize the equity or sell the hotel, Vosotas alleged.

Muhl’s entity BBM3 is now demanding payment of the entire balance after Vosotas allegedly defaulted on interest payments.

“By literally keeping Hotel Greystone in the dark, Muhl is preventing the hotel from making tons of money and is stopping James from earning any revenue that would allow the borrowers to pay off the balance of the loan and permanently refinance,” the lawsuit alleges.

Muhl’s attorney Levine said there were issues related to the plaintiffs that has caused delays in reopening the hotel. “Everything my client did was within the bounds of the law and with the plaintiffs’ knowledge and consent,” Levine said. “My clients have acted completely above board every step of the way. It is our opinion that the plaintiffs have done the opposite.”

An earlier version of this story misrepresented an aspect of Muhl and Vosotas’ friendship.