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Date of Issue: May 10, 2007

GSR proposes the end

GSR Development LLC wants to close its doors forever.

Bankrupt, with properties over-loaded with debt and two principals who apparently are no longer interested in resurrecting the company, GSR restructuring officer William Maloney proposed a company restructuring plan to the federal bankruptcy court in Tampa last week that would sell all the GSR properties at an auction sale and close down the company.

As part of the proposal, Bon Eau LLC of Sarasota will establish a reserve fund of $700,000 in exchange for a "release" by the court from its "compromise controversy" regarding GSR's Villa Rosa property in Anna Maria.

Of the reserve fund, $400,000 will be set aside for administrative claims such as the $567,000 in compensation that Maloney and GSR's law firm - Stichter, Riedel, Blain & Prosser of Tampa - have submitted to the court for work performed.

The unsecured creditors would have a $250,000 fund from Bon Eau, not nearly enough to cover the estimated $6 million in unsecured claims. The plan asks the court to establish a "priority list" for the unsecured claims according to the federal bankruptcy code.

Fifty-thousand dollars would be set aside for "litigation" by the unsecured creditors committee against the "targets," which include GSR principals Robert Byrne and Steve Noriega.

In his submission, Maloney said he "contemplates" that GSR's real estate holdings "will be sold for sums in excess" of what is owed on the properties. This would generate a "cash benefit" to the estate, he added.

Maloney has also asked the court for permission to sell GSR's office and non-real estate related equipment, as the company no longer operates as an on-going business. GSR's office at 5708 Manatee Ave. W. is now closed.

Not to be outdone by the $567,000 in compensation claims submitted to the court recently by Maloney and Stichter, Riedel, Blain & Prosser, attorneys and accountants for the unsecured creditors committee filed their own claims last week.

The law firm of Gray Robinson, representing the committee, filed a compensation claim for $192,223, while committee chairperson Penni Perez filed a claim for $32,454. In addition, Oscher Consulting, P.A., the forensic accountants hired by the committee, have asked for $29,275. The compensation requested by the committee totals $254,252, just $4,252 more than the reserve fund Bon Eau would provide for the committee.

Collectively, the compensation claims by attorneys and accountants on both sides of the GSR bankruptcy total slightly more than $821,000.

Federal bankruptcy Judge K. Rodney May has scheduled a hearing on the reorganization plan and the compensation claims for 10:30 a.m., Thursday, May 17, at the federal courthouse at 801 N. Florida Ave. in Tampa.