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Date of Issue: October 12, 2006

GSR asks for Villa Rosa 'yard sale'

GSR Development is proposing to sell its Villa Rosa properties and lots in Anna Maria to the highest bidder in what could be a desperate attempt to raise quick cash for the financially troubled company.

The move comes after GSR was spurned by Gaspar Properties Inc. of Tampa in an effort last month to sell off the entire property for $11.5 million.

GSR attorney Richard Prosser submitted a motion to the federal bankruptcy court Oct. 5 asking that GSR "sell all 15 parcels located in the Villa Rosa subdivision" at "auction" to the highest bidder on each lot. Bankruptcy Judge Rodney May set an emergency hearing on the motion for 9:30 a.m. Wednesday, Oct. 11.

Prosser claimed there were 15 parcels in the Villa Rosa property, including Lot 14, which contains a model home that is approximately 90 percent complete. GSR wants to sell that house, even though NBA player Theo Ratliff has a contract to purchase the home when completed for $2.5 million.

Under GSR's proposal, each lot has a minimum bid price, ranging from $600,000 for each of eight lots, $700,000 for four of the lots, $750,000 for one lot, $800,000 for another lot and $1.5 million for the model home.

In addition, GSR wants to sell a residential house it owns at 403 S. Bay Blvd. for a minimum of $700,000 and the lot at 401 S. Bay Blvd. for $575,000 - and no less.

If all the properties are sold at the minimum bid, GSR would rake in $11.925 million. The first, second and third mortgages would then be paid, leaving GSR with the balance, assuming the court agreed. A potential buyer can also submit a "bulk bid" of $11.925 million for all the lots

All bids must be received by GSR's proposed restructuring manager William Maloney by Dec. 1, 2006. A "good faith" deposit of 5 percent of the purchase price must accompany the bid. The deposit is refundable, according to Prosser.

The attorney also said in the motion that the property would be sold without any representation or warranties, or "as is," and "where is."

The winning bids - if the motion is approved - would be announced on Dec. 3, and the bankruptcy court would then hold a "sale hearing" not later than Dec. 6 to consider the offers.

Any objection to a proposed sale must be filed with the court by Dec. 4, the motion said.

"The sale of the auction property is critical to the successful reorganization" of GSR, Prosser claimed in the motion. Further, sale of the properties is a "confirmation of a plan of reorganization to be filed" by GSR. That reorganization plan is due in bankruptcy court Nov. 13.

Prosser's motion listed liens, claims and encumbrances against Villa Rosa, including taxes due to Manatee County, Fifth Third National Bank, Edward Furfey, M&I Bank, Frederich and Phyllis Fechner, Chief Management Inc., Amerson Nurseries Inc., the marriage of Arlend Byrne and Robert Byrne, Wachovia Bank and Freedom Bank. No mention was made of the unsecured creditors in the motion, who collectively have approximately $4.5 million in claims against GSR.

But there may be a possible "hitch" in the proposed auction of individual lots at Villa Rosa.

Anna Maria Mayor SueLynn said the city has never signed off on the final plat of the lots at Villa Rosa. According to the official map of Anna Maria, Villa Rosa is still one parcel, not individual lots.