Mandarin Oriental Developer Loses $2M Judgment to Buyer

The legal troubles at Penn-Florida’s Mandarin Oriental Boca Raton continue to mount after the developer lost a $2 million judgment.

A Palm Beach County Circuit Court judge sided with Douglas and Debra Jacobs after they filed a lawsuit against Penn-Florida affiliate Via Mizner Owner III, which alleged the developer failed to complete their condo in time, the South Florida Business Journal reported.

The developer announced plans for the 248-unit hotel-condo Mandarin Oriental in 2015, with an initial opening target of 2017, the outlet reported. The complaint alleged that the Jacobses signed a contract to buy a condo in the development in 2022, putting down a $2 million deposit, with a required completion date of Dec. 31, 2025.

The lawsuit said the condo wasn’t completed by then, and the couple wants to terminate the purchase agreement and be refunded. They won the judgment, and Judge James Sherman also ruled that the buyers could demand payment from the title companies holding their escrow deposits, the outlet said.

Robert Sweetable, the attorney representing Via Mizner Owner III, said he will file a motion for a rehearing, citing a conflicting ruling of another circuit judge in a case with a different buyer.

Thirteen buyers have filed lawsuits against Via Mizner Owner III for not completing the Mandarin Oriental project by the deadlines in their contracts, but only one resulted in a judgment against the developer.

Another couple who sued Via Mizner Owner III reached a settlement to receive $2.1 million from the developer. Their purchase agreement was terminated, but a lis pendens will remain on the unit until they receive repayment. Other lawsuits from buyers have been recently settled through confidential settlements, the outlet said.

Penn-Florida, led by Mark Gensheimer, filed for bankruptcy on the unfinished Mandarin Oriental hotel in December, The Real Deal previously reported. In May, Penn-Florida filed proposed bid procedures, paving the way for a bankruptcy auction of the hotel development site.

—Grace McClung