UFGator

The Blue Rose The Blue Rose Orlando, LPOrlando, LP

Involuntary Chapter 7 FilingInvoluntary Chapter 7 Filing

The Blue Rose Orlando, LPThe Blue Rose Orlando, LP

The Blue Rose Orlando, LPThe Blue Rose Orlando, LP

The Blue Rose Orlando, LPThe Blue Rose Orlando, LP

The Blue Rose Orlando, LPThe Blue Rose Orlando, LP

The Blue Rose Orlando, LPThe Blue Rose Orlando, LP

Removal of GP Removal of GP requires 95% voterequires 95% vote

Bankruptcy is Second Bankruptcy is Second Effort by Mark Effort by Mark

Halpern to Wrest Halpern to Wrest Control of Control of

Development from Development from Camilo AguirreCamilo Aguirre

First SuitFirst Suit

Filed April 17, 2008, in state court in Miami by Filed April 17, 2008, in state court in Miami by Blue Rose Orlando Investments, Ltd. (BROIL) Blue Rose Orlando Investments, Ltd. (BROIL) against the GP, The Immo Group, Inc.against the GP, The Immo Group, Inc.

Alleges that:Alleges that: 11stst Mortgage came due and was extended by Mortgage came due and was extended by

an “affiliate” of BROIL (with $2 million)an “affiliate” of BROIL (with $2 million) ““BROIL had no choice but to close on and BROIL had no choice but to close on and

fund the $2 million emergency loan”fund the $2 million emergency loan”

First SuitFirst Suit

Suit sought:Suit sought: An accountingAn accounting A permanent injuctionA permanent injuction

Freezing the bank accounts of the Limited Freezing the bank accounts of the Limited Partnership and GP, The Immo GroupPartnership and GP, The Immo Group

Ordering The Immo Group to stop Ordering The Immo Group to stop disbursing money until further order of the disbursing money until further order of the courtcourt

First SuitFirst Suit

The trial court denied an ex parte application for The trial court denied an ex parte application for an injunction without noticean injunction without notice

Undaunted, BROIL amended the complaint Undaunted, BROIL amended the complaint before service of processbefore service of process

First SuitFirst Suit

Sought same accounting and injunctionSought same accounting and injunction Ex parte application for injunction without Ex parte application for injunction without

notice was deniednotice was denied Suit was never served, and abandonedSuit was never served, and abandoned

AffiliateAffiliate

Jaymar Estates, Ltd.Jaymar Estates, Ltd. $2,000,000 loan is criminally usurious, resulting $2,000,000 loan is criminally usurious, resulting

in forfeiture of principalin forfeiture of principal

Criminal UsuryCriminal Usury

$2,000,000 loan at 18%$2,000,000 loan at 18% Plus, pay $5,600,000 plus 6% within 9 years, 7 Plus, pay $5,600,000 plus 6% within 9 years, 7

mos.mos. Results in $2,000,000 loan bearing interest at not Results in $2,000,000 loan bearing interest at not

less than 46.93% if paid at end of termless than 46.93% if paid at end of term Sec. 687.071 Fla. Stat. provides that interest Sec. 687.071 Fla. Stat. provides that interest

exceeding 45% is criminal usuryexceeding 45% is criminal usury Sec. 687.071(7) says debt is not enforceableSec. 687.071(7) says debt is not enforceable

Unenforceable DebtUnenforceable Debt

Therefore, the underlying debt of this creditor is Therefore, the underlying debt of this creditor is unenforceableunenforceable

This creditor may not file an involuntary petitionThis creditor may not file an involuntary petition The involuntary petition should be dismissedThe involuntary petition should be dismissed

Real Estate to be Real Estate to be DevelopedDeveloped

The Blue Rose Orlando, LPThe Blue Rose Orlando, LP

Value of AssetValue of Asset

At time of 1At time of 1stst Mortgage Loan: $53 million Mortgage Loan: $53 million Most probable value now: $18 millionMost probable value now: $18 million Jaymar appraisal: $7.5 millionJaymar appraisal: $7.5 million 11stst Mortgage balance: $23 million Mortgage balance: $23 million If property is worth far less than 1If property is worth far less than 1stst Mortgage, Mortgage,

why is 2why is 2ndnd Mortgage holder filing involuntary Mortgage holder filing involuntary petitionpetition

22ndnd Mortgage will be wiped out in Bankruptcy Mortgage will be wiped out in Bankruptcy

CreditorsCreditors

CreditorsCreditors

11stst Mortgage—Broadway Bank Mortgage—Broadway Bank Came due: April 30, 2008Came due: April 30, 2008 Foreclosure filed: July 14, 2008Foreclosure filed: July 14, 2008 Status: Status:

Complaint answered with affirmative Complaint answered with affirmative defenses on November 26, 2008defenses on November 26, 2008

Bank moved to strike one affirmative Bank moved to strike one affirmative defensedefense

CreditorsCreditors

11stst Mortgage—Broadway Bank Mortgage—Broadway Bank Came due: April 30, 2008Came due: April 30, 2008 Foreclosure filed: July 14, 2008Foreclosure filed: July 14, 2008 Jaymar Estates, Ltd., is defendant as junior Jaymar Estates, Ltd., is defendant as junior

lien holderlien holder In October, Jaymar filed Motion for In October, Jaymar filed Motion for

Enlargement of Time to file crossclaim, and Enlargement of Time to file crossclaim, and has never filed crossclaim or set motion for has never filed crossclaim or set motion for hearinghearing

CreditorsCreditors

22ndnd Mortgage—Jaymar Estates, Ltd. Mortgage—Jaymar Estates, Ltd. 2/29/20082/29/2008