email header
April 23, 2015

Welcome to Heller Waldman's News round-up aimed to give you a glimpse of our most recent developments.

Glen Waldman
Glen Waldman
Jason Gordon
Jason Gordon
Michael A. Sayre
Michael Sayre








































Glen Waldman
Glen Waldman
EBarnett
Eleanor Barnett
Jeffrey R. Lam
Jeffrey Lam

Heller Waldman Files
$120 Million Lawsuit Charging Sunny Isles Developers of Defrauding Retirees

 

Miami, Fla. April 23, 2015 - Heller Waldman filed suit on behalf of Tropicana Condominium Association for more than $120 million against high-profile developers of the proposed Ritz-Carlton Sunny Isles Beach, charging that they planned and implemented a fraudulent scheme to stop the neighboring Tropicana Condominium Association, Inc. from selling its building for future development, which would adversely affect the views of prospective Ritz-Carlton purchasers.


The suit, filed in Miami-Dade County's Eleventh Judicial Circuit, argues that major developers and joint venturers, Edgardo Fortuna and Manuel Grosskopf, and their respective companies, Fortune International and the Chateau Group, have illegally conspired to halt the sale of the nine story Tropicana and subsequent development, in order to provide unabated views for their 52 story project currently being marketed and constructed next door.

 

Any sale of the Tropicana, a 31-year-old, nine-story, ocean front building, with unabated and gorgeous water views to the east, south and southwest, will likely result in development of another luxury high-rise condominium on the property. Such a building could either equal or exceed the 52 stories contemplated by the Ritz-Carlton. Should the Tropicana remain unsold, however, views from the planned Ritz-Carlton above the 9th floor would be unobstructed to the south, a key selling point of the high-end units being marketed. The possibility of construction of such a high-rise tower on the Tropicana property could decrease significantly the value of certain Ritz-Carlton units, which are being marketed for up to $25 million for a penthouse unit.


"Their motive is simple, profit. The mantra is: if we can stop you from being able to sell, we can charge more for our units and realize more profit," Glen Waldman said who is lead counsel for Tropicana.


The complaint details a plot that reads like a Hollywood screenplay of David vs. Goliath alleging that 5 units were bought surreptitiously through straw buyers directed by the joint venture headed by Mr. DeFortuna and Mr. Grosskopf. It is alleged that had the true owners and purpose been properly disclosed, these buyers would never have been approved by the condominium board. In fact, none of the units has ever been occupied and it is alleged they were purchased solely to attempt to invoke the veto power of any sale possible sale.

 

Miami's Daily Business Review (DBR) reported that the suit accuses Defortuna and Grosskopf of "secretly scooping up five of Tropicana's 48 units - just enough for the 10 percent ownership stake needed under the condo association's bylaws  to block future sales." 

 

"Why did they pick that magic number? We know that the five units have been bought and nobody's moved into them," Tropicana attorney Glen H. Waldman, managing partner of Heller Waldman in Miami, told the DBR. "It's kind of weird."

 

This illegal ploy is not the first of its kind to occur in Miami during a hot real estate market. As reported by The Wall Street Journal, on the lawsuit, "To Miami real estate observers, the case is the latest example of the measures that property developers will take to control land and development in one of the nation's hottest real-estate markets. Miami real-estate brokers say it's not unusual for developers to buy condo units in older buildings in good locations to have influence or sway over future development plans and deals."


What makes this situation especially egregious is that the majority of the 43 unit owners at the Tropicana impacted by these activities are long-time homeowners and retirees. To these unit owners, the potential sale of the Tropicana, which is expected to be north of $120 million, could be the most significant financial event of their lives and will protect and enhance their financial futures in their coming golden years. The association has already received an unsolicited offer of $100 million for the property and expects future offers to be higher.

 
"Appropriate resolution of this matter will allow homeowners, many of whom are retirees, to be able to sell their homes like any other homeowners, without interference by powerful entities such as these," Mr. Waldman said. "But, if this plan hatched by the developers succeeds, it will mean that Goliath wins. We are not going to let that happen!" Assisting Glen with this matter are firm attorney's Jason Gordon and Michael Sayre.

 

Priv� Development Moving Full Steam Ahead. Heller Waldman Files New $225 Million Suit Against Williams Island Homeowners

As referenced in our January newsletter, and after receiving continued extensive coverage in the media, the legal logjam preventing the completion of the sidewalk on the South Island and the issuance of a building permit for Priv� on the North Island has now been broken and the Project is moving full steam ahead. 

 

On the heels of the previously reported lawsuit against the City of Aventura over its failure to deem the sidewalk on the South Island complete, which the City determined was a condition precedent to the construction of Priv�, a series of legal victories by Priv�, has turned the tables. Rulings by the Third District Court of Appeal and the trial judge have dissolved the injunction prohibiting the completion of the sidewalk.  Similarly, multiple subsequent efforts to reinstate the injunction all have been defeated by the Heller Waldman legal team led by Glen Waldman, Eleanor Barnett and Jeff Lam. A Foundation Permit for Priv� has been issued and while significant legal disputes remain, Priv� is on its way to construction.

 

As part of the legal effort to get Priv� off of the drawing board and out of the ground, Heller Waldman recently filed a $225 million suit against a who's who of influential South Island and Williams Island homeowners. This suit, filed after the suit against the City, targeted those homeowners, who Priv�'s developers contend led illegal efforts to halt Priv�'s construction, costing them millions in sales and other costs. The neighbors, including a developer and a current Aventura city commissioner, are either members of the Williams Island Property Owners Association (WIPOA) or Island Estates Homeowners Association, Inc. (IEHA), who launched a "scorched earth" offensive of threats and lawsuits and spread false information to stop a project they had previously voted to support.

 

Filed in Miami-Dade's Eleventh Circuit, the complaint charges defendants with tortious interference, civil conspiracy and equitable estoppel. The centerpiece of the scheme as alleged is a "trespass lawsuit" filed by the defendants, a false claim that a second sidewalk must be built on the South Island before construction of Priv� moves forward, which has now been successfully neutralized in court as discussed above.

 

"Their motivation is simple spite, sour grapes and greed. The ring leaders of this effort are people of wealth and influence, also involved in real estate, many of whom wanted to profit from the project, but whose ambitions were not realized," said Glen H. Waldman, managing partner of Heller Waldman, who represents Priv� Developers, Last Lot, Corp., NI Holdings, LLC, Two Islands Development Corp., and BH3 Realty LLC, along with partner Eleanor Barnett and associate Jeffrey Lam.

 

"After failing in all of their endeavors to stop the Project through the appropriate channels... they have resorted to threats and lawsuits against the City, disseminating false and inaccurate information about the Project, filing lawsuits against certain Plaintiffs attacking fundamental vested rights and another lawsuit that purports to be about the South Island, when in fact it is about stopping the development on the North Island, and interfering with the good faith settlement discussions of the parties who had reached a favorable resolution of these issues," according to the complaint.

 

"Not just the city of Aventura, but everyone who is illegally blocking construction of this development for their own ends must be held accountable," Mr. Waldman said.

About Heller Waldman


Heller Waldman is a Coconut Grove-based boutique law firm concentrating on complex commercial litigation and estate and tax planning. Its attorneys take pride in working closely with business and individual clients toward successful dispute resolution, business succession and wealth preservation. Founded by partners with extensive experience practicing at major South Florida firms, the Heller Waldman team specializes in providing personalized services. Please visit:   www.hellerwaldman.com.