Robert Furr, the court-appointed trustee
now overseeing the bankrupt Palm Greens Recreation
Association, delivered a blunt message on Tuesday, May 5, to
more than 400 residents of the Delray Beach condominium
complex. Furr did not offer estimates on what the lump sum
assessment could be, nor what a monthly payment for the
special charge could amount to.
“You need to put down your swords and make peace," Furr said
during a town hall discussion in which the Boca Raton
attorney detailed the events that resulted in the highly
unusual bankruptcy. "There is no future if you continue to
fight. All you are doing is making the lawyers rich.”
He stated that, as trustee, his aim is to achieve the best
outcome for the most people but warned that homeowners may
well face a special assessment to pay off creditors totaling
several million dollars. The payments could be structured to
be paid over several years to cushion the impact, he noted.
Furr did not offer estimates on what the lump sum assessment
could be, nor what a monthly payment for the special charge
could amount to.
The Palm Greens Recreation Association manages amenities for
two condo towers at the Delray complex, Condo 1 and Condo 2.
Neither Condo 1 nor Condo 2 are parties to the bankruptcy
case, which was filed in February.
Trustee joins court in chastising prior management of rec
association
Like Bankruptcy Court Judge Eric Kimball, Furr chastised the
recreation association for pursuing meritless lawsuits and
then filing equally meritless appeals. Now the recreation
association is facing the prospect of paying more than $1
million in legal fees to its legal adversaries, Furr noted.
Furr said he may sue former Recreation Association board
members for the conduct that led to the bankruptcy filing.
And lawyers who represented the association may have
committed legal malpractice, he added.
They, too, may be held accountable, Furr said, noting: “The
lawyers who represented you led you down this trail. A good
lawyer needs to tell his client no.”
Furr said he will do whatever he can to recover money for
the Recreation Association, which sought protection from
creditors three months ago through a Chapter 11 filing after
it could not pay its bills.
Palm Greens, built more than 50 years ago, stands north of
Lake Ida Road, between Military Trail and Jog Road, in
suburban Delray Beach. The Recreation Association oversees
leisure amenities, including the swimming pool, clubhouse,
and tennis courts, in the development, which has about 1,400
condominiums and villas.
Those residences are governed by two separate entities,
Condo 1 and Condo 2. While neither condo residential
association is a party to the bankruptcy proceedings, their
residents are affected by the Recreation Association
bankruptcy because each condo association pays about $40,000
a month to the Recreation Association to maintain the
amenities at Palm Greens.
And the two condo associations could be on the hook to help
the Recreation Association pay off creditors depending on
rulings by the bankruptcy court.
Lennar is expected to soon turn over the recreational
amenities at Palm Greens to a new recreation association
Furr added that he has hired a forensic accountant to review
how the Recreation Association spent its funds. As trustee,
he noted that he is now the Recreation Association and will
make all decisions about its operation.
“Nothing gets paid without my say,” Furr said at the town
hall.
He said he expects to soon establish a new recreation board
consisting of nine members, three from the two condo
associations at Palm Greens and three from Delray Trails,
the adjacent community Lennar built on what was once the
Palm Greens golf course.
Delray Trails' owners could be called on to help bail out
the Recreation Association even though their HOA had no
involvement in the lawsuits, Furr said, noting that is an
issue that will need to be addressed.
Between the two Palm Greens' associations and Delray Trails,
the complex includes more than 2,000 residential units,
making it one of the largest 55-plus communities in the
county.
“We are going to get some fresh faces on the Recreation
Association,” Furr said, recounting how the Recreation
Association squandered money on lawsuits that should never
have been filed. He encouraged owners to become involved in
community operations.
“They (the Recreation Association) sued Lennar in Miami-Dade
County and lost. Then, they filed the same lawsuit in Palm
Beach County and lost. And then they kept appealing those
losses. Every lawsuit you lost. And now, you are looking at
having to pay Lennar’s legal fees.”
Before Furr was appointed by the court, the Recreation
Association went through two bankruptcy lawyers, firing one
because he would not continue to pursue litigation,
according to presiding Judge Kimball.
On Wednesday, May 6, Kimball approved a development
agreement that allows Lennar to oversee the new recreational
complex it built until it turns over the facilities to the
new recreation board.
Between the two Palm Greens' associations and Delray Trails,
the complex includes more than 2,000 residential units,
making it one of the largest 55-plus communities in the
county.
“We are going to get some fresh faces on the Recreation
Association,” Furr said, recounting how the Recreation
Association squandered money on lawsuits that should never
have been filed. He encouraged owners to become involved in
community operations.
“They (the Recreation Association) sued Lennar in Miami-Dade
County and lost. Then, they filed the same lawsuit in Palm
Beach County and lost. And then they kept appealing those
losses. Every lawsuit you lost. And now, you are looking at
having to pay Lennar’s legal fees.”
Before Furr was appointed by the court, the Recreation
Association went through two bankruptcy lawyers, firing one
because he would not continue to pursue litigation,
according to presiding Judge Kimball.
On Wednesday, May 6, Kimball approved a development
agreement that allows Lennar to oversee the new recreational
complex it built until it turns over the facilities to the
new recreation board.
Furr recommended that the agreement be accepted, noting that
failing to do so could expose the Recreation Association to
another lawsuit and millions more in liabilities. The
Recreation Association had wanted to oppose the development
agreement.
Furr said it is possible that Lennar could turn over the
amenity complex to the new Recreation Association within the
next 90 days. Meanwhile, Connie Moccia, a resident of Condo
1, told Kimball that many owners feel trapped.
"They cannot sell," she noted. "No one is going to buy while
this bankruptcy is going on. It is a real problem. And so
many people bought not knowing about the lawsuits." Several
recent buyers at Palm Greens told Furr they were unaware of
the ongoing litigation in the community and might not have
bought had they known.
Latest in Delray condo saga is trustee, judge's blistering ruling