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Date of Issue: March 01, 2007

GSR's unsecured creditors aim for 'Targets'

Not satisfied with the progress of the attempted sale of any of bankrupt GSR Development LLC’s real estate assets, the official GSR unsecured creditors committee has asked the federal bankruptcy court to allow it to take off the kid gloves and strike back at GSR principals Robert Byrne and Steve Noriega along with several other firms and individuals involved in some of GSR’s “usurious” transactions.

Creditor’s committee attorneys John Anthony and Stephenie Biernacki filed their 19-page motion last week asking Judge K. Robert May to allow the committee to pursue a series of interrelated claims (The Villa Rosa Claims) “in an adversary proceeding” against “The Targets,” namely Byrne, Noriega, Randall Bono of Bono Eau Enterprises LLC of Sarasota, Bono LLC, The Real Estate Law Firm LLC (now defunct) and individuals Thomas Coelho and Derek Filcoff. Coelho and Filcoff are Sarasota-based business associates of Bono, the motion claims.

In essence, the creditor’s committee wants court permission to file individual lawsuits and other actions against the aforementioned individuals and companies, a lawyer familiar with the case said. The committee believes that avenue holds a better chance for the creditors to get any return on their money than does the effort by GSR chief restructuring officer William Maloney to sell GSR’s properties through local real estate companies.

At issue to the committee’s claim of “usurious” or fraudulent transactions is the “disputed mortgage lien” of $7.68 million held by Bono Enterprises LLC against GSR’s Villa Rosa property in Anna Maria.

Anthony has called this a “tainted transaction” and has questioned why $7.68 million was given in 2005 against a property worth $11.5 million. He also noted that Bon Eau accused Noriega of “contriving the lending relationship as clearly usurious, as he has apparently done in the past.”

Under Florida law, if a loan exceeds the maximum annual interest rate of 24 percent, it’s considered “usurious” and therefore an illegal transaction that can’t be enforced.

But the committee has found little comfort as to the legal and financial result of this “tainted transaction,” only noting that the exact distribution of the $7.68 million is “unclear.” What’s certain is that none of GSR’s unsecured creditors got any of the money.

Anthony also wants to know why a “bona fide effort” to sell Villa Rosa to Gaspar Properties Inc. of Tampa fell through in September 2006, just two months after GSR declared bankruptcy.


Specific complaints

Anthony said in his motion that the committee is currently drafting a complaint against the “Targets” that will include specific counts and causes of action. The committee, Anthony said, is “prepared to articulate each of the counts” when the court schedules a hearing on the motion.

Efforts to determine if the “specific counts” are criminal or civil charges against “Targets” were unsuccessful.

Coelho, Filcoff and Bono have been involved in other real estate transactions in Sarasota, including the refinancing of a piece of downtown Sarasota property that prompted an investigation by local and state authorities.

As of Monday, Feb. 26, May had not yet set a date for a hearing on the motion.


Extended deadline

May did agree to a motion by GSR attorney Richard Prosser to extend the deadline to April 30 for the company to file a restructuring plan and a full financial disclosure statement.

It was GSR’s third extension since the company filed bankruptcy on July 13, 2006. The original filing deadline was in November 2006.