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Date of Issue: June 15, 2006

GSR principals sued by former pal, while Horizon, Freedom banks join legal fray

Add Horizon Bank, Freedom Bank and well known Island businessman and hotelier Kent Davis to the growing listing of Islanders, banks and investors who have filed a lawsuit against GSR Development LLC and/or its principals, Robert Byrne and Steve Noriega.

Davis filed a lawsuit May 31 in the Manatee County Circuit Court against Byrne and Noriega personally, claiming the two men owe him a total of $600,000 for two promissory notes he gave them on Oct. 3, 2005.

Horizon Bank followed that with a mortgage foreclosure action on June 8 for $7.2 million against GSR and Byrne/Noriega over the failed Rosa del Mar condominium project in Bradenton Beach.

Not to be outdone by its banking rival, Freedom Bank instituted its own legal action late against GSR on June 9. Details of the case were unavailable at press time.

Davis, through a company he owns called Entrust LLC, gave GSR Development a $200,000 loan, while in a separate action also on Oct. 3, Davis himself gave the two men $400,000.

In his lawsuit, Davis claimed the two men "personally unconditionally guaranteed" both notes and agreed to be personally responsible for repayment.

The lawsuit claims the two men failed to pay even the first installment on either note and he is now demanding a full settlement, including interest, court costs and attorneys fees.

Davis said the filing was done on the advice of his attorney to protect his interests. He said he wished Noriega and Byrne "nothing but the best" and still holds them and GSR "in high regard."

Horizon Bank’s claim is for $7.2 million, including interest. The money was reportedly the acquisition amount allowing GSR to purchase the property.

These latest cases are the 10th and 11th legal actions in the past four months against either GSR Development LLC and/or Byrne or Noriega, in addition to a number of liens filed against GSR, Byrne and/or Noriega properties.

Since Feb. 1, 2006, lawsuits filed against GSR and/or Byrne and Noriega include:

  • An action on May 19 by Chief Management Inc. of Cortez for $268,000 against property at 401 S. Bay Blvd. in Anna Maria.
  • Holmes Beach resident Cynthia Graeff filed a legal action on May 23 against GSR, alleging the company owes her $29,500 for a loan she gave GSR in October 2005.
  • A mortgage foreclosure by JD Paradise LLC for $384,211 against GSR for property at 518 Key Royale Drive in Holmes Beach.
  • A mortgage foreclosure action for $2.1 million by Synovus Bank of Tampa for the Hibiscus condominium project on Fifth Street South in Bradenton Beach.
  • A lawsuit filed by Sherry Gray of Bradenton for $67,500.
  • An action by Longboat Partners LLC for default on an $800,000 note.
  • Legal action by Ed Furfey of New Jersey against Byrne and Noriega for an undisclosed sum.
  • A lawsuit filed by James M. Dornan, as trustee of the Dornan Family Trust, for a $100,000 deposit on the now stagnant Rosa del Mar condominium project in Bradenton Beach.
  • A suit filed by Randy Moore, also for a $100,000 deposit on a Rosa del Mar condominium.
  • Liens totaling $1.04 million filed by Spectrum Construction Management Inc. of Tampa against GSR, Byrne and/or Noriega properties.

The total dollar amount of legal actions against GSR Development and/or Byrne and Noriega filed the past four months is $11.66 million, exclusive of the unspecified amount in the Furfey suit.


Horizon rips GSR abilities

In its June 8 lawsuit against GSR Development and Robert Byrne/Steve Noriega, Horizon Bank pulled few punches, claiming GSR "does not have the ability to pay" the $7.2 million owed the bank, nor the 2004 or 2005 real estate taxes, which have not been paid.

Regarding the Rosa del Mar project in Bradenton Beach, the company has also "stopped its plans to develop the property as a condominium development," the bank alleged and "does not have the financial ability to continue developing the property."

Horizon also asked the court to appoint a receiver to oversee the property during the legal action "in order to preserve the property."

In addition to GSR, Byrne and Noriega, Horizon also named Delta Engineering and Inspection and Roland and Diane Vildostegui as defendants in the case.