More than four years after putting a $3 million deposit on an unfinished penthouse in disgraced developer Rishi Kapoor’s first luxury condominium project, a stranded condo buyer is still fighting to recoup its funds.
The condo buyer, Mironrest CG, objected to court-appointed receiver Bernice Lee seeking to hire her own law firm to handle clawback litigation.
It’s the latest kerfuffle in the ongoing liquidation saga of Location Ventures, the defunct Coral Gables firm founded by Kapoor.
Lee and Mironest CG attorney Jonathan Minsker declined comment.
The proposed contingency fee for Kozyak Tropin & Throckmorton, where she is a partner, is “excessive and unreasonable,” Miami-based Mironest CG said in a motion filed last month. The stranded condo buyer wants U.S. District Judge Jacqueline Becerra to reject Lee’s request.
Lee is seeking approval to hire the Kozyak firm for a fee based on 27 percent to 33 percent of any gross proceeds from clawback lawsuits and settlements, court filings show.
Lee was appointed receiver of Location Ventures shortly after the U.S. Securities and Exchange Commission sued Kapoor, his firm and its affiliates for fraud.
Kapoor was accused of misappropriating $93 million in investor funds meant for his real estate projects, most of which fell apart as Location Ventures imploded in a tsunami of lawsuits and investigations, including probes by the FBI and IRS, according to published reports.
The SEC settled its claims against Kapoor in November 2024, after he agreed to conditions including not serving as an officer or director of a company with securities for five years.
Since then, Lee has focused on selling off Location Ventures’ properties, including a Miami Beach development site for $17.5 million. Most recently, the receiver sought approval to sell an unfinished mixed-use project in Coconut Grove to a lender with a $27.4 million credit bid.
Mironest CG’s condo deposit
Kapoor’s Location Ventures completed most of Villa Valencia in the summer of 2022. The 13-story Coral Gables building with 39 units represented the then-six-year-old firm’s first luxury condominium project.
But despite obtaining a certificate of occupancy, the developer left three penthouses at Villa Valencia unfinished, including a top-floor unit that Mironest CG agreed to purchase for $6 million, the buyer’s motion states.
The true identity of Mironest CG’s owner is unknown. State corporate records only list the registered agent, Miami-based law firm Pardo Jackson Gainesburg. The name of Mironest CG’s authorized representative is redacted in a copy of the purchase agreement. The entity is among dozens of investors, buyers and vendors that have sued Location Ventures and its affiliates in Miami-Dade Circuit Court.
General contractor accusations
Mironest CG alleges in its motion that Location Ventures’ general contractor for Villa Vallencia, Winmar Construction, assisted in “the diversion of millions of dollars,” including billing $10 million for work on the penthouses while only actually completing $2.2 million in work.
Location Ventures allegedly siphoned $93.9 million in sale proceeds from Villa Valencia’s completed units as a “piggy bank for the fraud … to arbitrarily repay lenders and for other projects,” the motion states.
Mironest CG alleges its deposit was used as collateral for loans provided by Location Ventures insiders.
When Mironest CG pressured Location Ventures to finish its penthouse, the developer told the buyer it needed to pay an additional $1.4 million directly to Winmar to complete the build-out, the motion states.
“Being unaware of the fraud, and eager to move from rented accommodations into their new home,” the funds were wired, the motion states. “Sadly, even though the wires were sent to Winmar, they still essentially evaporated.”
Winmar CEO Edwin Vallegas did not respond to requests for comment.
Mironest CG’s objections
Lee’s investigation is likely to recover tens of millions of dollars from Winmar and other Location Ventures insiders, the motion alleges.
However, the proposed contingency fee structure for Lee’s law firm “would be manifestly unreasonable and harmful to the estate’s innocent stakeholders” if any funds obtained via claw back measures are not enough to repay claims by Mronest CG and others, the motion states.
The contingency is “almost certain to result in a windfall fee of tens of millions of dollars to” Lee’s firm, while reducing by approximately one-third the remaining proceeds available to satisfy claims by Mironest CG and other plaintiffs, the motion states.
Mironest CG alleges that Lee failed to obtain proposals from other qualified law firms and failed to explore other options such as litigation financing. To avoid an appearance of a potential conflict of interest, Lee “should be required to explore the market for alternative firms, fee structures and financing options,” the motion states.