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PUTTIN’ ON THE RITZ
An Opinion By
Milena D. Macias For most of us, we have to figure out a way to squeeze another dollar from an already stretched budget in 2026 to pay for one of the largest increases in Florida Power & Light for you guessed it – the electric bill. And that’s on top of those “special assessments” lingering to be passed on to us by our condominium and homeowner associations. What happens when an association informs you they are going to start a lawsuit because they decide others aren’t paying their fair share … and then you find … it’s just another one more of the So many lies that we may be forced to believe. It seems that some homeowner and condominium associations have an uncanny way of winning, even when they are losing – and not just thousands of dollars – but millions of dollars. In the end, it is just costing the members of the association more money. How do they call it winning? Answer: Chapter 11 of the United States Bankruptcy Code. If a business, including a mandatory community association, cannot meet its debt obligations, it may seek protection under Chapter 11 of the United States Bankruptcy Code. Upon filing a Chapter 11 petition, an automatic stay is enacted, requiring all creditors to halt collection efforts. The association remains in control of its operations under the supervision of the bankruptcy court. Once the reorganization plan is approved by the court and accepted by creditors, it is confirmed. Typically, administrative expenses such as wages and attorneys are paid first, followed by secured creditors and finally unsecured creditors. The Ritz-Carlton in Fort Lauderdale (the “Ritz”) is a 166-key hotel that includes 34 condo-hotel units and 28 condo units managed by Castillo Grand Hotel Condominium Residences Association (“Association”). In 2019, the Association initiated litigation in Broward County against the hotel owners and two hospitality investment affiliates, Brookfield Properties and Watermark Capital Partners. The Association alleged that condo-hotel unit owners were bearing an inequitable portion of the property’s expenses. The hotel owners and affiliates responded with a countersuit. After several years of litigation, the Association was ordered to pay $7.9 million, in addition to a $1.5 million claim from Ritz-Carlton Hotel Company -- resulting in approximately $9 million in unsecured claims. On November 7, 2025, the Association filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, seeking to restructure its debts. If I were a member of that Association I could not be blamed for …. Especially since … the outstanding $7.9 million claim is the most expensive liability listed in the Association’s Chapter filing…. These financial damages were based on a special assessment for attorneys fees and other legal expenses related to the suit. In fact, Judge Robinson stated: “[a]fter presiding over this case from its inception, the court is uniquely familiar with the lack of any merit to plaintiff’s legal contentions,” and observed that the condominium association dragged out the suit and demanded unnecessary discovery. Make sure that if your association is charged with special assessments that you are not blindsided by attorneys, accountants or boards who may be filing meritless claims. In the end, those who lose the most are the members….. |
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