A trustee representing a bankrupt association for a Delray Beach-area subdivision says he'll hire a famous lawyer to pursue claims against those who may have been responsible for policies that led to the association's financial demise.
Robert Furr, the trustee for Palm Greens Recreation Association, told The Palm Beach Post he wants to hire Miami-based lawyer David Cimo, who was part of the legal team that secured a $12 million settlement for the bankrupt company that owned thousands of recovered Titanic artifacts.
Palm Greens Recreation Association sought protection in February from creditors under a Chapter 11 filing after concluding it could not pay its bills. The Recreation Association oversees leisure amenities that include the swimming pool,
the clubhouse and the tennis courts in the Palm Greens development, one of the larger condo developments in the county.
The individual residential condominium buildings served by the recreation association are not a party to the bankruptcy case.
Bankruptcy Court Judge Erik Kimball, citing “gross incompetence, dishonesty, and conflicts of interest,” appointed Furr earlier this year to oversee the affairs of the Recreation Association. Former members of the Recreation Association have declined to comment on the judge's findings.
Potential targets of the litigation include former professionals, such as lawyers, accountants, bookkeepers and auditors, who advised the association on policies that ultimately led to its bankruptcy filing in January. Also targeted could be former board members who pursued costly litigation that was primarily responsible for the bankruptcy, according to Furr.
Furr told The Post that he plans to seek the bankruptcy court's approval to hire Cimo, whose firm specializes in pursuing complex insolvency claims for bankruptcy trustees. He was part of a team that secured that $12 million settlement, alleging the recovered Titanic artifacts were sold for significantly less than their fair market value.
To avoid litigation costs, Cimo has agreed to work on the Palm Greens case on a contingency basis. He will receive 40% of any amount he recovers for the Recreation Association but he will be entitled to be reimbursed for his costs.
“If I did not think there was a reasonable chance of recovery, I would not be pursuing this hire,” said Furr.
Palm Greens’ two condo associations, Condo One and Condo Two, are not in bankruptcy, but they are heavily impacted because they fund the Recreation Association's budget. Furr has warned residents that they could face special assessments.
“We are hopeful that the recovery of funds will lower the costs to the Recreation Association of emerging from bankruptcy,” Furr said.
Built more than 50 years ago, the 55-plus community is north of Lake Ida Road between Military Trail and Jog Road.
The new Delray Trails development is also impacted by the bankruptcy
The law firm hired by Furr is expected to question why the Recreation Association paid legal fees for a defamation lawsuit brought by one of its a members. Bankruptcy Judge Erik Kimball has already raised the issue. Kimball noted that the matter was a personal issue and did not involve the Recreation Association.
Also affected by the bankruptcy are those who bought homes at Delray Trails, a higher-end development of 436 town homes that Lennar is building on what was once the Palm Greens golf course.
As part of the purchase of the golf course, Lennar agreed to build new recreational facilities for Palm Greens and its new development, Delray Trails.
Mike Diamond is a journalist atThe Palm Beach Post, part of the USA TODAY Florida Network. He covers Palm Beach County government. You can reach him at mdiamond@pbpost.com. Help support local journalism. Subscribe today.
This article originally appeared on Palm Beach Post: Exclusive | Trustee mulls claims in Delray rec center bankruptcy
