The saga of who will take ownership of the failed Palm House Hotel has taken another detour.
U.S. Bankruptcy Judge Erik P. Kimball turned down a settlement offer from Glenn Straub, a controversial Wellington developer and former casino owner, to buy the Palm House Hotel, according to the Palm Beach Daily News. But this doesn’t mean that Straub is out of the running to buy the unfinished condo-hotel in the future.
Straub was trying to purchase the property for $5.13 million in cash, according to the Palm Beach Daily News. Straub also claims he was owed about $40 million from Palm House’s previous owner Robert Matthews’ company after it defaulted on its mortgage payments to Straub.
But Straub’s settlement agreement fell through because the judge would not provide him a “bar order” that would have protected the developer and his company, KK-PB LLC, from any future legal action related to the property, the Palm Beach Daily News reported. Creditors, including EB-5 investors, objected to the settlement.
Straub can seek to enter a new offer in a March 8 bankruptcy auction for the property, where he can try to get credit for the amount he is owed by Matthews.
Late last year, Related Companies offered $32 million for the Palm House Hotel property in a stalking horse bid.
Federal officials have charged Matthews, with multiple counts of wire and bank fraud and money laundering over the development. The project solicited money from the federal EB-5 program, which gives foreign investors a visa in exchange for an investment in American enterprises.
Matthews has pleaded not guilty to the charges. [Palm Beach Daily News] — Keith Larsen
Via • The Real Deal Miami
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