Fourth Cabi Affiliate Files For Chapter 11

Oct 12, 2011 No Comments by

Affiliates of Aventura-based Cabi Developers have cost lenders plenty but they’ve become consistent revenue generators for lawyers handling their bankruptcies.

Cabi 301 Commercial LLLP has become the fourth Cabi affiliate to file for Chapter 11 bankruptcy protection since the housing and financial markets collapsed in 2007.

Cabi 301 is seeking to restructure nearly $16 million in debt backed by a six-story office building at 301 Arthur Godfrey Road in Miami Beach and an adjacent parking lot.

The largest creditor is MUNB Loan Holdings LLC, an affiliate of the Bank of New York Mellon. MUNB is owed $15.12 million but says the properties are worth less than that, according to a bankrupcty case filed Friday in Miami. Last February, instead of a foreclosure action, MUNB filed a Miami-Dade lawsuit against Cabi executives who are guarantors of the loan seeking payment.

Cabi Developers executive Elias Amkie Levy didn’t return calls for comment.

Cabi 301 countered with Friday’s bankruptcy filing and on Tuesday, the company asked U.S. Bankruptcy Judge A. Jay Cristol to stay the circuit court suit.

Cabi 301 also wants Cristol’s OK to hire the law firm Bilzin Sumberg Baena Price & Axelrod in Miami to handle the bankruptcy case.

Attorney Mindy Mora, a Bilzin partner, is handling Cabi’s other bankruptcies.

With its numerous lawsuits, Cabi’s legal bills are adding up. Bilzin Sumberg’s hourly rates range from $445 to $700 for partners like Mora, according to court records. Bilzin partner Jason Jones would handle the Miami Beach case along with Mora.

Last week, the law firm received a $50,000 retainer from Cabi 301 for the Miami Beach case.

Mora did not immediately respond to a request for comment.

Aborted Projects

Cabi 301 acquired the Miami Beach property during the boom years and planned to build 42 residential condos and a three-story garage. But the plan never materialized. Cabi 301 kept operating the 37,500-square-foot building as an office, which is currently 98 percent leased, according to court records.

A Cabi affiliate was behind one of the largest bankruptcies in South Florida during the recession. Cabi Downtown failed to pay a $209 million loan to a lending syndicate led by Bank of America and was forced to sell the newly built Everglades on the Bay condo in downtown Miami last year.

Through a bankruptcy auction, Cabi sold the distressed note for about $142 million to real estate investor Rockwood Capital. Rockwood took title to about 672 unsold units in the building, which Rockwood renamed Vizcayne.

Cabi affiliate Cabi SMA Tower is in bankruptcy court fighting to keep control of a 2.27-acre site in Miami’s Brickell area, once planned for a high-rise condominium. Brickell Central, the entity that owns the defaulted note on the Brickell site, is seeking to foreclose on the property. According to court documents, it is owed about $30 million. The parcel is at South Miami Avenue and Southwest 14th Street.

The foreclosure is on hold while the bankruptcy case is resolved. Last month, Cristol rejected the noteholder’s motion to allow the foreclosure to move forward.

Cabi is proposing to develop the property and is “in the process of reactivating its existing building permit” and plans to move ahead with “additional construction on the building foundation,” according to bankruptcy court documents.

Cabi New River is also in bankruptcy court seeking to restructure a $17.5 million loan from HSBC Realty Credit. The loan is backed by 5.9 acres on the south bank of Fort Lauderdale’s New River. Cabi assembled the land during the condo boom with plans to build a large indoor boat storage facility for more than 500 boats and a high-rise condominium. But the proposal stalled during the recession.

Source:  DBR

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