Unfinished Arena Must Pay Up

A federal bankruptcy judge has ordered the developers of an unfinished Florida arena to ante up a $60,000 interest payment on the $6.3 million they owe a creditor by Sept. 18 or face the dismissal of a Chapter 11 reorganization case.

The Chapter 11 filing gives DVA Arena LLC protection against creditors. The company and its president, Sal Diaz-Verson, hoped to build and operate a $70 million hockey arena on 60 acres near Lakewood Ranch, Fla., five years ago, according to the Bradenton Herald.

But creditors began to complain they weren’t getting paid in 2005, and several lawsuits were filed. The unfinished venue faced foreclosure July 28, but Diaz-Verson’s last-minute Chapter 11 filing suspended the foreclosure and sent the case before a judge.

The $60,000 in question represents one month’s interest at 11 percent owed to creditor Schroeder-Manatee Ranch. The judge ordered that paid, and for DVA Arena to purchase liability insurance or face dismissal of the reorganization.
If the Chapter 11 reorganization is dismissed, the foreclosure on the property may move ahead.

Judge Caryl Delano made the ruling after listening to arguments that the DVA Arena has no income and that its prospects of coming up with the $16 million to pay creditors and $40 million in new financing were slim, according to the Herald.

“Since the July 28 foreclosure sale was canceled, we have not heard anything from DVA Arena in the way of trying to work things out,” SMR attorney Michael Horan told the judge, according to the paper.

Delano said she was at first inclined to dismiss the reorganization on the spot, noting that DVA Arena owes more to creditors than its own asset schedule says the property is worth. But the $200,000 in attorneys fees spent by SMR reportedly swayed her to reconsider.

A final evidentiary hearing has been set for Oct. 6.