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Date of Issue: March 17, 2005

Trustee asks court to toss Tidemark bankruptcy plan

U.S. Bankruptcy Trustee Felicia Turner, overseeing the Tidemark bankruptcy petition, has filed a motion with the bankruptcy court in Tampa asking that Tidemark's bankruptcy be either dismissed or converted to a Chapter 7 (involuntary) bankruptcy.

Turner claimed Tidemark and managing partner Nick Easterling have failed to provide her with tax returns, proof of insurance, copies of monthly operating reports and proof of DIP bank accounts as required by the court order authorizing Tidemark to continue to operate as a business.

Tidemark's "lack of compliance with the orders of the court" prevent her from properly administering the case, Turner said, and it's time to throw the case out.

The hearing on Tidemark's proposed reorganization plan with RPG was scheduled for Wednesday, Sept. 8.

But Tidemark's latest troubles don't end with Turner's motion.

Like a jilted suitor asked to "speak now or forever hold your peace" at the marriage ceremony, Southstar Development of Coral Gables has filed a motion against the proposed reorganization plan of the bankrupt Tidemark project in Holmes Beach. The new plan filed by Tidemark two weeks ago would allow Tidemark to join forces with Reliance Property Group of Conn. and not Southstar as previously announced in July.

Southstar claims it had a "no shop" agreement with Tidemark and Easterling, giving Southstar exclusive rights to the property. Easterling had no business dumping the Southstar plan in favor of one offered by the Reliance Property Group of Conn.

In addition, Southstar claims Tidemark owes it $215,103 in "administrative expense" in preserving Tidemark after it agreed to join forces with Easterling in July to save the troubled project.

Southstar also "funded the debtor's operations" with debtor-in-possession financing "in anticipation of acquiring the debtor's assets," court documents said. Southstar also claimed Tidemark has defaulted under the DIP agreement, and failed to provide it with a number of documents, including monthly operating reports on how the DIP finance loan of $140,000 was spent, as required by the U.S. Bankruptcy Code.

Southstar asked the court to deny approval of Tidemark's disclosure statement and order Tidemark to pay the administrative claim of $215,103.

Easterling said he could not comment on the pending motions, but said he was confident that the court would approve the new plan involving RPG. "Everybody would get paid," under that plan, said Easterling.

RPG owner Ken Dardis has pledged up to $5.6 million in financing to get the company out of federal bankruptcy court and operating as a solvent business.

If the court allows the plan, Tidemark creditors would have to vote to approve the reorganization.

The planned 40-unit Tidemark hotel/condominium and marina just north of the Wachovia Bank building was approved by the Holmes Beach City Commission in August 2001.