- March 23, 2011
A high-stakes plan worth at least $20 million is in the works to save the hotel connected to the Colony Beach & Tennis Resort, a landmark tourist destination on Longboat Key.
The operating entity behind the 237-room hotel filed for Chapter 11 bankruptcy in October. That entity, Resorts Management Inc., had $4.405 million in liabilities and $472,500 in assets, according to documents filed in U.S. Bankruptcy Court in Tampa late last month.
The company's largest secured creditor is Bank of America, which is owed $3.742 million. The company also owes about $1 million to a list of 20 unsecured creditors.
The chairman and owner of the Colony, Dr. Murray “Murf” Klauber, hopes to emerge from bankruptcy later this year, according to the court filings. Klauber and his family are also the majority owners of Resorts Management.
Klauber's reorganization plan requires two delicate undertakings. First, he must sell 70% of his equity interest in Resorts Management. The buyer of that stake would control the resort and all onsite business activities.
The money from that sale would go toward the second endeavor — a $20 million renovation project of the Colony, which has been recognized worldwide for its tennis facilities. The other funds for the renovations could come from limited partner contributions and a loan or an investment made by Klauber, according to court records.
The renovation plan would be going on in conjunction with Klauber's other goal: To pay back the $3.742 million to Bank of America within a year of the bankruptcy court approval of the proposed reorganization plan.
The other debts, both secured and unsecured, would be paid back over five years. The unsecured claims are made up mostly of customer deposits on rooms and employees for paid time off, the reorganization plan states.
The bankruptcy filing was the result of a three-year battle between Resorts Management and individual Colony unit owners over the payments of repairs to the property.
A bankruptcy court judge could rule on the reorganization plan by March. Katie Moulton, the president and general manager of the Colony, declined to comment on specifics of the plan, pending approval from the court.
But Moulton told The Longboat Observer, sister paper of the Review, that she remains hopeful the reorganization process can be resolved out of court.