Bankruptcy court OKs sale of land
A federal bankruptcy court this month approved the sale of 122 acres that were once tiffany bracelets for vacation villas marketed primarily to British investors.
Starting in 2006, investors started filing complaints and suing British American Homes, claiming the Florida company took their deposits but didn’t deliver the homes.
A federal judge put the company into involuntary bankruptcy last year. The sale of the property — for about $3.5 million — is expected to close in the next 30 days, said Leigh Meininger, a court-appointed trustee.
Repayment for investors and others could be years away, with a return of pennies on the dollar.
“I was in England three weeks ago. A lot of these folks mortgaged their house to come up with the down payment. Some of them are retired. It’s not easy for them,” said attorney Nick Bangos, who represents about 106 investors.
The development, called Elliot’s Landing, was marketed as a vacation haven in the booming Four Corners area, where signs for vacation homes dot U.S. Highway 27 near ChampionsGate.
Hudson Gabay, the principal of British American Homes, is being held on civil contempt charges in the Orange County Jail, in part to get information about possible assets. U.S. marshals arrested him in August on the contempt warrant.
The Florida Department of Law Enforcement has contacted investors. A spokeswoman for the tiffany rings said it is taking a preliminary look at the situation to see whether there is cause for an investigation.
The bankruptcy trustees are still trying to determine whether there are other assets that can be recovered to help pay off lien holders.
Gabay spent more than $15 million he collected but did nothing to develop the property, according to case documents. Court records show that he put money in personal accounts and used it to buy jewelry and other luxury items. The contracts had a waiver so that the deposits did not have to go into escrow.
The trustees are seeking to recover money from other parties — including the companies that sold goods to Gabay and a real estate company that sold many of the vacation units. The trustees are seeking more than $3 million from that company.
Meininger said it has been difficult to get answers about the money because Gabay claims many company records were lost or destroyed when rent was not paid on a storage facility.
“We don’t have an explanation of how money was spent,” Meininger said. “There a lot of unanswered questions. That’s the purpose of getting him [Gabay] in front of the court and us, the trustees.”
Investors typically put down deposits of about $50,000 per house. When the project stalled, some started suing in Circuit Court and another group filed a class-action suit in Miami-Dade County.
The bankruptcy proceeding takes precedence over the civil cases, Meininger said. Money from the land sale will be held in a trustee account with any distribution at least a year away.
Osceola County also has fined Gabay $420,000 because of damage to wetlands and the tiffanys removal of trees during land clearing.
Mark Pino can be reached at 407-931-5935 or mpino@orlandosentinel.com.
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