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Date of Issue: July 05, 2006

GSR may consider bankruptcy court for protection

rosa del mar
Not a rosy future
Plans for GSR Development's Rosa del Mar condominium project in Bradenton Beach appear to have fallen by the wayside in the wake of the company's financial difficulties. Islander Photo: Paul Roat

The saga of Island developer GSR Development LLC and principals Robert Byrne and Steve Noriega is expected to take a not unexpected twist in the very near future.

A lawyer involved with one of the numerous lawsuits against GSR and/or Byrne and Noriega individually has indicated he expects the company - and possibly the two principals - to enter voluntary bankruptcy within the next few weeks.

"It’s the only logical step," said the attorney, who asked not to be identified.

Indeed, with more than a dozen lawsuits against the principals and company totaling more than $12 million, a bankruptcy reorganization is the smartest recourse available for the company, the attorney said.

In bankruptcy, all assets of the company - and the principals if they declare personal bankruptcy - would be placed under control of the Federal Bankruptcy Court in Tampa, which would appoint a trustee to administer the bankruptcy.

The trustee would also review all the transactions of the bankruptcy applicant(s), determine assets and liabilities, listen to any proposed reorganization plan(s) and make recommendations to the bankruptcy judge for disposition of the case(s). In some instances, bankruptcy can take up to two years or longer to complete, according to the source.

"Considering the complexity of the financial transactions, I would think it would be some time before anyone got paid or any reorganization plan approved," the attorney said.

While GSR had not yet filed for bankruptcy by July 3, Noriega is no stranger to the proceedings.

He filed a Chapter 7 bankruptcy action in 1988 and a Chapter 13 bankruptcy in 1998. Both cases were eventually discharged by the court.

The records of both cases were unavailable online, but the latter case reportedly involved a Noriega-owned development company called True Value Homes of America Inc.

Florida corporation records indicate the company was incorporated in 1991 and dissolved on Aug. 26, 1994.


Hail to the chief

While other civil plaintiffs against GSR Development and/or principals Robert Byrne and Steve Noriega are still cooling their heels awaiting a trial date, a lawsuit filed May 19 by Chief Management Inc. of Cortez against GSR and Byrne and Noriega individually seems to have acquired light speed.

A final judgment was entered in the case on June 23 awarding Chief Management $292,053.12 plus interest and reasonable attorney fees.

The lawsuit had alleged that Chief Management loaned GSR and Byrne and Noriega individually $268,000 on Dec. 20, 2005, and the loan was in default. The note was secured by a second mortgage on GSR property at 401 S. Bay Blvd. in Anna Maria.

The remaining plaintiffs, including some small investors and major banks such as Gold Bank, Synovous Bank and Horizon Bank, all of which have millions at stake in GSR, may have to wait several years before any financial settlement if the bankruptcy papers are filed as expected.