The land was auctioned July 24 in US Bankruptcy Court's Southern District of Texas in Corpus Christi in proceedings overseen by Judge Richard Schmidt. The seller, Zohouri Group South Padre LP, was represented by Jeffrey A. Holliden and Robert Williamson, managing directors in the Houston office of Holliday Fenoglio Fowler LP, and associate director Barbara Guffey. The minimum bid was $38 million.
Corpus Christi attorney Michael B. Schmidt, who served as Chapter 7 bankruptcy trustee for the seller, confirms the winning bid amount, but says the sale cannot be officially announced until the presumptive buyer returns a signed contract to the court. The contract had not been returned as yesterday.
Minutes of the proceedings show six bidders, with the winning bid placed by David Farshy. He could not be reached for comment.
Mitchell Ayer, an attorney with Thompson & Knight LLP in Houston who attended the auction on behalf of the holder of a second lien on the property, tells GlobeSt.com that Farshy was acting for Lancore Realty Inc. of Boca Raton, FL. According to Ayer, the final price will pay off the entire $38 million of secured debt owed by the seller as well as unsecured claims, leaving a "substantial distribution to equity."
Calls to Lancore principal Merv MacDonald were not returned by deadline. However, Lancore's website describes the company as a "multi-faceted real estate brokerage and consulting firm" and gives no indication of direct investment activity. A blog maintained by a real estate company on South Padre claims the purchaser is in fact a group from Dubai. Calls to the blog writer for confirmation also were not returned.
Speculation has centered on Island Capital Group LLC, a New York City-based company "dedicated to the development and operation of mega-yacht marinas," which bills itself as "the only financial advisor dedicated to real estate securitization in the Middle East." Island Capital serves as the exclusive financial advisor to Emirates National Securitization Corp. [ENSeC], the United Arab Emirates functional equivalent of Fannie Mae.
The property, which includes 538 developable acres, was put out to bid after the owner, an investment group formed by Atlanta-based developer Fred Zohouri in conjunction with Houston real estate executive Jose Lora, defaulted on its acquisition loan. Zohouri and Lora bought the land in May 2006. The developers planned to build high-end residential and mixed-use projects on the site as well as on other sites in Texas and Florida. They filed for bankruptcy protection in late 2006.
The land has about 7,785 feet of beachfront along the Gulf of Mexico and Laguna Madre Bay. It encompasses the entire width of the island. The site's buyer will have the ability to establish zoning and master planning upon acquisition.
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