https://gotoby.com/wp-content/uploads/2020/10/go-toby-logo.jpg 0 0 Toby Tobin https://gotoby.com/wp-content/uploads/2020/10/go-toby-logo.jpg Toby Tobin2009-02-05 00:00:002021-03-19 15:16:23Ginn Bankruptcy Update – Amended Filing
Ginn Bankruptcy Update – Amended Filing
Lots of money spent prior to bankruptcy filing and lost souls at Tesoro Preserve
Palm Coast, Florida – February 5, 2009 – Facts continue to emerge from the Ginn-LA (real estate developer Bobby Ginn and financial partner Lubert-Adler) chapter 7 bankruptcy filings affecting Tesoro in Port St. Lucie and Quail West in Naples. In Port St. Lucie, Tesoro Preserve is not listed as an asset in the filing, leaving property owners there wrestling with the developer rather than the bankruptcy trustee over issues surrounding membership dues and Property Owners Association (POA) fees. At Quail West, an amended bankruptcy filing adds the two golf courses and 70,000 square foot clubhouse (current value "unknown") to the list of debtor’s assets. It also disclosed 2008 payments of over $4 million related to debt counseling or bankruptcy prior to the December 23rd filing.
The section of Tesoro marketed as Tesoro Preserve was not included in the bankruptcy filings. This leaves property owners there to deal with the developer, rather than the bankruptcy trustee. The trustee has terminated contracts with the developer’s affiliated service companies (Ginn Property Management, Ginn Security, and Austin Outdoor) at Tesoro to reduce the cost to property owners.
Tesoro Preserve has not "sold out." Hence, the developer still controls that POA and maintains contracts with the Ginn affiliated service providers. 24-hour gated security is provided although there are no amenities and no residents according to one property owner. "Tesoro Preserve is a ghost town," the owner said. Mandatory POA fees remain at $600 per quarter. Owners are also required to maintain at least a social membership at the Tesoro Club. Social membership is currently $500 per month (reduced from $600). An optional golf membership is an additional $300 per month.
Tesoro Preserve owners hope to duplicate the success of the Conservatory POA. At the Conservatory, a Ginn community in Palm Coast, Florida, property owners recently gained control of their POA. The new board promptly terminated contracts with Ginn Property Management and Ginn Security. They also renegotiated the landscaping contract with Austin Outdoor for reduced services at a much lower cost. Ginn Property Management is said to have charged $20 per unit per month for property management services. The new provider charges about 75% less. The monthly Ginn Security bill for 24-hour gated security at the Conservatory was reportedly $20,000. Aside from the developer owned Tom Watson designed golf course and magnificent clubhouse, there are currently only four builder models and one private home in the community.
The amended filing dated January 28th reveals new facts. The two golf courses and 70,000 square foot clubhouse have been added to the list of debtor (Ginn-LA Quail West Ltd., LLLP) assets. These properties are operated by the member-owned Quail West Foundation yet are owned by the debtor. They were reportedly not included in the list of properties liened by Credit Suisse, but do fall under the chapter 7 bankruptcy. It’s not clear what Credit Suisse’s status will be. It’s possible that they may be an unsecured creditor with regards to the golf facilities (not liened) and a secured creditor with regard to the 262 unsold building lots which were included in the lien.
The amended filing also reveals the following income from operations:
2006 – $57,353,210
2007 – $11,900,262
2008 (Jan – Nov) – $400,865
Unpaid property taxes:
Collier County – $821,851.79
Lee County – $394,270.90
The filing also lists 2008 payments "related to debt counseling and bankruptcy" exceeding $4 million.
As do most developers, Ginn built a complex organization of literally hundreds of different legal entities with which to own and operate his several projects. While the separation is designed to shield each entity from the financial and/or legal pitfalls encountered by other entities, the interrelationships remain cloudy and subject to interpretation. A common brand with websites interlinked can easily lead someone, a creditor or a prospective property buyer, to feel they are dealing with one company (e.g. Tesoro and Tesoro Preserve are apparently not owned by the same entity). Such a discussion touches on the concept of "piercing the corporate veil," a subject better left to attorneys.
The Ginn-LA bankruptcy is probably not atypical. Ginn-LA is clearly not the only developer faced with critical financial circumstances necessitating hard choices. Nearly all real estate developers face similar problems. I focus on the Ginn Company simply because they are the biggest developer in my neck of the woods.
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It was just announced Thurs PM that Bobby is now back in NASCAR!
“Tesoro Preserve has not "sold out." Hence, the developer still controls that POA and maintains contracts with the Ginn affiliated service providers. 24-hour gated security is provided although there are no amenities and no residents according to one property owner. "Tesoro Preserve is a ghost town," the owner said. Mandatory POA fees remain at $600 per quarter. Owners are also required to maintain at least a social membership at the Tesoro Club. Social membership is currently $500 per month (reduced from $600). An optional golf membership is an additional $300 per month.”
Well, well, well. With each revelation of court documents about the Ginn Empire, another layer of a fat onion is being removed and the smell of the onion is getting stronger and stronger. Self-dealing, self-promotion at other’s expense seemed to be part of Ginn business plan and the “normal” way of conducting business.
No one person can carry out plans in such a grand scale without accomplices. Some of the accomplices defended this operation on GoToby. I wonder how much they knew and willfully concealed such information from the unsuspecting public?
Mutual trust is the pre-requisite for commerce and society to work properly. Lack of trust will result in disintegration and requiring government intervention to re-build the missing trust. That is what President Obama’s administration is trying to do now.
I feel sorry for the next real estate “professional” who will have to do business with me. He or she will have to show it to me in writing and counter signed by the President of the company and the document will have to be notarized before I accept a statement from him or her as a true fact.
My question to the accomplices: was it worth it?