The owner of the Sagamore Hotel in Miami Beach scored a victory in bankruptcy court last week. But the good news may be short-lived.
U.S. Bankruptcy Judge A. Jay Cristol sided with the hotel owner, Sagamore Partners, in a battle with its lender, which is trying to foreclose on the beach hotel. Sagamore Partners is led by Martin Taplin, president of Miami Beach Vacation Resorts. The boutique hotel is at 1671 Collins Ave.
On Nov. 8, Cristol ruled that JPMCC 2006-LDP7 Miami Beach Lodging and its loan servicer, LNR Partners, failed to send proper notice of default to Sagamore Partners in 2009 when they filed the foreclosure action. Cristol said JPMCC and LNR failed to mail the notice of default to Sagamore’s attorneys, as mandated by the loan documents. Cristol said JPMCC could send proper notice now to Sagamore and its Greenberg Traurig attorney and give the borrower 10 days to cure the defaulted loan of more than $30 million.
“The nature and extent of the proceedings to follow thereafter will be determined by the actions of the parties,” Cristol wrote.
But on Monday, JPMCC and LNR, among other defendants, filed an emergency motion asking Cristol to reconsider his order prior to Thursday, when Cristol is scheduled to consider confirming Sagamore’s reorganization plan.
JPMCC fears the recent ruling would influence the outcome of the confirmation hearing, according to court papers filed Monday. The reorganization plan calls for the payment of at least $8 million to JPMCC to reinstate the loan so Sagamore Partners can continue to make loan payments as initially established by the loan documents. Last week, Cristol rejected Sagamore’s claim that JPMCC didn’t have standing to foreclose on the debt. The hotel owner claimed JPMCC needed to have the original note, which was assigned to different investors during the real estate boom years, to be able to enforce it.