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The Bancorp Bank vs 550 Seabreeze Development LLC and JAWOF 515 Seabreeze, LLC

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PlaintiffsDefendants

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The Bancorp Bank

vs.

550 Seabreeze Development LLC and JAWOF 515 Seabreeze, LLC

Filing Date:January 25, 2018

Case:The Bancorp Bank v. 550 Seabreeze Development LLC et al

Jurisdiction:Federal District Court for the Southern District of Florida

Status:Pending

Civil / Criminal:Civil

Cause(s) of Action:

Breach of Contract

Related to:

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Chinese investors

Jinhong Wang, Zuoyang Wang, Jianfa Xie, Pingning Guo, Tao Zhang, Ye Tian, Lie Lin, Xia Cao, Lin Ma, Tong Wang, Pengxiang Ni, Chunyan Xu, Rui Wang, yi Liu, Yuesheng Qin, jianfeng Huang

vs.

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The Bancorp Bank

Las Olas Mezzanine Borrower LLC, Ray Parello, Ken Bernstein, Jack Kessler, Eugene Kessler and Ocean Hotel Lender LLC

Description:

Las Olas Ocean Resort, a hotel project on Fort Lauderdale beach that attracted funds from hopeful Chinese immigrants through the EB-5 visa program, has been targeted for foreclosure. The Bancorp Bank (NYSE: TBBK) filed a foreclosure lawsuit on Jan. 25 in U.S. District Court in Fort Lauderdale against 550 Seabreeze Development LLC and JAWOF 515 Seabreeze LLC over a mortgage with $36.94 million in principal due. The unfinished Las Olas Ocean Resort, a hotel project on Fort Lauderdale beach that attracted funds from hopeful Chinese immigrants through the EB-5 visa program, has been targeted for foreclosure. The Bancorp Bank (NYSE: TBBK) filed a foreclosure lawsuit on Jan. 25 in U.S. District Court in Fort Lauderdale against 550 Seabreeze Development LLC and JAWOF 515 Seabreeze LLC over a mortgage with $36.94 million in principal due. It concerns the partially-completed hotel that was slated for 136 rooms in 12 stories, a four-story parking garage with 268 spaces, and a 12,000-square-foot restaurant. The hotel has been under construction on the 34,299-square-foot lot at 550 Seabreeze Blvd./525 South Florida Lauderdale Beach Blvd. The developer also owns the 18,372-square-foot parking lot across the street at 515 Seabreeze Blvd. In addition to seeking to foreclose the project, Bancorp Bank filed an emergency motion to appoint a receiver for the property due to the borrower’s alleged “mismanagement and incompetence” and an alleged warning from general contractor Straticon in early January that it would “walk off” the job unless it is paid. Straticon filed a construction lien for more than $5 million against 550 Seabreeze Development in Broward County Circuit Court over allegedly unpaid bills. Attorney Rebecca S. Trinkler, who represents 550 Seabreeze Development, couldn’t immediately be reached for comment. The plaintiff’s letters to the developers identified Raymond Parello, Ken Bernstein, Eugene Kessler, and Jack Kessler as principals of the hotel developer. None of them were named in the lawsuit. A website promoting the Las Olas Ocean Resort as an EB-5 visa investment mentions all four of those individuals as partners. Investors were asked to invest at least $500,000 in exchange for qualifying for a visa to immigrate to the U.S. Bancorp Bank’s motion for receivership says 550 Seabreeze Development raised $30 million from Chinese investors through the EB5 program, and those funds were considered debt secured by an equity interest in the parent company. The bank originally granted a mortgage of up to $50 million to 550 Seabreeze Development in 2013. Construction started in 2015 and the loan required it to be completed by the end of March 2017, a date the developer missed, according to the complaint. Bancorp Bank hired Michael McGrenra of Dayhill Group to oversee the project during construction. In a signed affidavit, he said the developer failed to adequately protect the property in advance of Hurricane Irma and that the delay from the hurricane should have been no longer than four weeks. The delays at the project were “primarily the result of poor management and lack of funding,” McGrenra stated. The complaint alleged that 550 Seabreeze Development defaulted by failing to make a payment in December 2017, by terminating its lease with restaurant Senor Frog, and by losing a property management agreement with Aston Hotels and Resorts Florida. ______________________________________________________________________________________________________ Roger Bernstein, an immigration lawyer who owns American Life Investments, and Ron Klein, a partner with the law firm Holland & Knight, told The Real Deal they expect Congress to extend the life of the EB-5 program in its current form for a third time in the past year. “From what I am hearing, we will see an extension,” Bernstein told TRD. “There is not a consensus among senators and house members on what targeted employment areas should be and the employment methodology.” Bernstein has assisted several EB-5 projects in South Florida, including Design 41, a seven-story mixed-used building in Miami’s Design District that will include class A office space, a restaurant, and luxury retail, and the Las Olas Ocean Resort hotel in Fort Lauderdale. “For Design 41, we raised $14.5 million from 29 EB-5 investors,” he said. “We raised $30 million from 60 EB-5 investors for Las Olas Ocean Resort.” The Seabreeze developer filed for bankruptcy on Feb 26th, a hearing had been scheduled on Bancorp's motion for appointment of receiver on the 27th but due to the bankruptcy filing the foreclosure action has been stayed. Not good for the EB-5 investors or any potential suit against the developer. Prior to the stay, Jeffrey Schneider from LKLS&G filed a motion to intervene on behalf of 31 EB5 investors https://therealdeal.com/miami/2015/12/04/eb-5-investments-in-sofla-hanging-in-balance/

Files
Jan
25
2018

Bancorp Complaint

Bancorp Complaint

Bancorp_Complaint.pdf
Jan
26
2018

Bancorp Plaintiff's emergency verified motion

Plaintiff's Emergency Verified Motion for Entry of Order Appointing Receiver

Bancorp_M_Appoint_Receiver.pdf
Jan
26
2018

Order requiring Amended Complaint

Order requiring Amended Complaint

Order_Re_DJ_Amended_Compl.pdf
Jan
26
2018

Description of Collateral

Description of Collateral

Exh_1.pdf
Jan
26
2018

Affidavit

Affidavit

Exh_2_Affidavit.pdf
Jan
25
2018

Summons

Summons

Exh_5_Summons.pdf
Feb
08
2018

PERMIT INFORMATION

PERMIT INFORMATION

City_of_Fort_Lauderdale___Building_Services.png
Mar
14
2017

2017 FLORIDA LIMITED LIABILITY COMPANY ANNUAL REPORT

2017 FLORIDA LIMITED LIABILITY COMPANY ANNUAL REPORT

2017_FLORIDA_LIMITED_LIABILITY_COMPANY_ANNUAL_REPORT.pdf
Mar
05
2018

EB-5 Investors move to court

The thirty-one nonparty movants respectfully move this Court, pursuant to Fed. R. Civ. P. 24(a)(2), for an Order (i) granting the EB- 5 Investors leave to intervene in this action for the limited purpose of being heard on matters relating to their EB-5 immigration interests in the subject of the action, including their position on Plaintiff’s pending motion for appointment of a receiver; (ii) dispensing with the requirement under Rule 24 that this Motion be accompanied by a pleading setting out the claim or defense for which intervention is sought; and (iii) to the extent Plaintiff’s application for appointment of a receiver is granted, appointing a receiver with relevant EB-5 project experience who will take into account the interests of the EB-5 Investors.

M_Intervene_EB5_Investors_2-23-18.pdf
Mar
05
2018

Exhibit A

42-1.pdf
Mar
05
2018

Exhibit B

42-2.pdf
Mar
05
2018

Exhibit C

42-3.pdf
Mar
05
2018

Exhibit D

42-4.pdf
Mar
05
2018

Exhibit E

42-5.pdf
Mar
05
2018

Exhibit F

42-6.pdf
Jul
21
2018

Complaints and objections to proofs of claim

Complaint_and_Objections_to_Proof__of_Claim.pdf
Attorneys, Regional Centers and Firms
Bernstein Osberg-Braun, P.L.Immco Investments LLCFoley & Lardner LLPRoger BernsteinKevin  JeffersMark J. Wolfson, Esq.EB-5 For Florida Regional Center Florida Overseas Investment Center RC168 America Regional Center

News & Updates

EB-5 investments in SoFla hanging in balance
December 04, 2015
Unfinished hotel on Fort Lauderdale beach with Chinese funding faces $37M foreclosure
January 31, 2018
Bancorp sues former Turnberry execs over stalled resort in Fort Lauderdale
January 30, 2018
EB-5 investment immigrants at risk, a project in South Florida is facing a foreclosure
February 02, 2018
Next Steps for EB-5 Investors in 550 Seabreeze | Los Olas Resort Project
February 20, 2018
Facing foreclosure, Las Olas Ocean Resort developer files for bankruptcy
March 03, 2018
Florida developer files for Chapter 11 bankruptcy protection
March 07, 2018
Fla. Hotel Project Struggles Highlight EB-5 Risks
April 04, 2018
Fort Lauderdale hotel project to head to auction with $39M stalking horse bid
July 12, 2018
Chinese EB-5 Investors in Unfinished Las Olas Ocean Resort Allege Fraud
July 18, 2018
Twenty-one EB-5 investors sue developers of unfinished Fort Lauderdale hotel
July 18, 2018
Half-Built Fla. Resort Gets OK For Bankruptcy Auction
July 18, 2018
Stalking horse bidder to buy planned Fort Lauderdale Beach hotel
August 13, 2018
Half-Built Fla. Resort's $39M Sale Gets Court Approval
August 17, 2018
Bankruptcy court approves purchase of stalled Las Olas hotel project
August 17, 2018
Bankruptcy court finally approves sale of Fort Lauderdale hotel project
August 17, 2018
What happens when an EB-5 project fails?
October 30, 2018
New owners of Fort Lauderdale Beach hotel project score $52M loan
November 30, 2018

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