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By Paul Brinkmann
November 12, 2012
Miami Beach developer Marty Taplin’s company deserves another chance to cure a default regarding the Sagamore Hotel, U.S. Bankruptcy Judge A.J. Cristol has ordered.
Cristol’s order, dated Friday, paves the way for the Sagamore to emerge from Chapter 11 bankruptcy and, possibly, defeat a $40 million foreclosure attempt by a subsidiary of LNR Partners.
LNR has spent about $2.8 million in fees and costs on the case.
According to the order, LNR failed to provide proper notice of default before filing a foreclosure against the Sagamore in 2009. The order says LNR must correct that error and give Sagamore Partners Ltd. 10 days to bring its loan current.
Sagamore’s bankruptcy plan already lays out a strategy for paying up and emerging from bankruptcy: The company has been making loan payments into an escrow account. Along with that money, Taplin is prepared to spend an additional $5 million to bring the hotel out of Chapter 11.
Taplin has accused LNR of baiting him into defaulting on a payment to draw him into special servicing on his loan, and then refusing to negotiate with him afterward. Those allegations are still pending in related litigation.
LNR has been fighting Taplin’s allegations. Requests for comment were declined by Taplin’s attorney, Peter Russin of Meland Russin & Budwick, and a spokesman for LNR.
The Sagamore is poised to take advantage of improving values on the beach, hotel analyst Scott Brush said.
“The Sagamore has been around a while, but it’s been renovated and contains the Taplins’ huge art collection,” Brush said. “The beachfront hotels are coming back up in value. They’re not quite where they were yet, but they’re getting there.”