Naples Bay Resort seeks judge's OK for emergency cash to stay afloat

— The Naples Bay Resort needs a new infusion of cash to keep its doors open.

In November, a compromise was struck in bankruptcy court that gave the resort enough money to get through the busy tourist season. But with the end of season about a month away and the slower summer months ahead, the resort will need a helping hand to keep it operating through the rest of the year.

"Money is not running out right now. But it will after the season," said Gerard McHale, a Fort Myers forensic accountant.

As a court-appointed receiver, McHale is overseeing the resort's operations.

"I'm certainly covered through April," he said.

He's pushing to get financing in place now, instead of waiting until the last minute. So is Diane Jensen, a Fort Myers attorney and the trustee for the bankruptcy case.

On Thursday, Jensen filed an emergency motion asking a judge for authority to obtain more than $3 million in financing to "continue the project as a going concern so the project can be sold."

She described the financing as "essential to avoid irreparable harm to the estate" and necessary to keep it from falling "precipitously in value."

A hearing on the motion is scheduled for Wednesday, with the bankruptcy judge deciding whether to approve the fresh infusion of money.

"This is a fairly sizable operation and not one that you can run having $100,000 in the bank. You have to have real money," McHale said.

At least three different groups offered financing in the prior round. Later, one of them pulled out.

This time, the money would come from Family Exchange LLC, which has offered the best terms, McHale said.

It's the same Texas investment group, going under a different name, that stepped forward last year and made an offer for long-term financing of nearly $3.8 million to keep the resort operating, but that offer was rejected in court. The partners squabbled over the offer, in part due to the conditions that came with the loan.

Jack Antaramian on NewsMakers

Jack Antaramian on NewsMakers

In a compromise, the partners instead agreed to accept short-term financing of $650,000 from Gulfwater Investments LLC, based in Naples, enough to keep the resort afloat through season.

"Everybody knew that financing was just going to be a Band-Aid," said Jack Antaramian, a prominent Naples developer and one of the partners in the project.

If new financing isn't approved soon, the resort's management will be forced to file a so-called WARN notice with the state. Companies have to file a notice with the state under the Worker Adjustment and Retraining Notification Act if there's the threat of going out of business and letting go more than 50 employees in the next 60 days.

"We are very concerned about this WARN notice. That is what we are trying to prevent now," Antaramian said.

The resort has more than 100 employees. McHale is confident it won't close.

"We have a property there that is inevitably going to operate. This place is not going to go dark," he said.

Paying the bills is a struggle because of all the legal battles involving the partners and a foreclosure filing. The project is more than just the hotel.

"The project is supposed to have ongoing sales of the condominium units, ongoing sales of the yacht slips," McHale said. "Given the status of the foreclosure, I can't even sell any units. That is when this thing starts to make sense again, if and when the animosity stops and the project can go back to an operating project."

There are 11 condo units and more than 70 yacht slips left to sell. Condo resales are going for more than $1 million, indicating the value of the unsold units and the potential to raise more money to support operations, McHale said.

While season has been strong, he pointed out that at least 70 percent of the hotel rooms have individual owners, so the developer is only getting a share of the revenues those rooms generate.

"It has been a great season," Antaramian said. "But it clearly has not been enough to pay the bills that are necessary, given the state of affairs. There is just not income to pay the bills."

Last year, Antaramian and several other creditors filed an involuntary petition for Chapter 7 bankruptcy against the resort's development company, Basil Street Partners, which he's a partner in.

Antaramian is at odds with his three other partners: Fred Pezeshkan, president and CEO of Manhattan Construction (Florida), a general contractor in Naples, and foreign investors Iraj Zand and Raymond Sehayek. His partners have unsuccessfully fought to dismiss the bankruptcy case.

In 2010, Regions Bank, a lead lender, foreclosed on the Naples Bay Resort project after Antaramian and his partners defaulted on a $36 million mortgage.

Antaramian later stepped into the shoes of the bank, buying the note for about $8.7 million.

A foreclosure trial before a judge is scheduled for Oct. 15 in state court.

__ Connect with Laura Layden at www.naplesnews.com/staff/laura_layden

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Discuss
  • Print

Related Stories

Related Links

Comments » 0

Be the first to post a comment!

Share your thoughts

Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.

Comments can be shared on Facebook and Yahoo!. Add both options by connecting your profiles.

Features