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Date of Issue: March 08, 2007

Byrne demands millions from his bankrupt company

If bankrupt GSR Development LLC is ever liquidated and the creditors paid, GSR principal Robert Byrne intends to get in on the spoils.

Not content with putting his own company into voluntary bankruptcy last July, Byrne has now joined the list of 143 creditors of the financially disabled real estate development firm by claiming to the federal bankruptcy court in Tampa that the company he owns actually owes him money - $5.777 million.

Byrne filed a claim with the court Feb. 20 alleging that GSR owes him $4,631,438.30 for "member's equity interest." That same day, Byrne filed another claim for $179,136 for money he said he loaned the company, and added another claim for $49,101.96 as "pre-petition guarantee" money.

Byrne, in conjunction with his estranged wife Arlene, filed a separate claim that GSR owes them $917,331 for "guarantor liability," stating that they had paid GSR debts totaling that amount. The most prominent debt Byrne said they paid for the company was $600,000 to Island businessman Kent Davis, the former owner of the Siam Garden Resort in Anna Maria.

Byrne claimed to the court that he and his wife paid Davis with cash and property they own in Palm Beach County.

In a separate claim, Arlene Byrne told the court that GSR owes her $95,034 as a "trustee," and $4,238.28 for "debt on behalf of GSR."

Not to be outdone, Bon Eau Enterprises LLC of Sarasota - the company that may or may not own GSR's Villa Rosa property in Anna Maria - also filed a claim Feb. 20, alleging that, per a deed of transfer from Byrne and fellow GSR principal Steve Noriega, it is the rightful owner of Villa Rosa and GSR owes it $8.377 million.

The total value of all claims against GSR is now $46 million, with unsecured claims reaching $11.37 million.

When the company filed bankruptcy on July 13, 2006, it claimed assets of $46 million against liabilities of $33 million.

But Byrnes' claim that he paid off Davis is "not entirely accurate," according to Davis.

While Davis agreed that he accepted a partial settlement from Byrne and his wife for a "big chunk" of the debt that involved cash and property in Palm Beach County, he said he's still owed $117,000. Davis said that debt doesn't include a third mortgage he has on property at 615 Key Royale Drive in Holmes Beach, property that AMI Development LLC - a Byrne-owned company - recently "sold," at least on paper, to GSR.

Gary Headricks of Chief Management LLC in Bradenton also received a negotiated settlement from Byrne, Davis said, while former Island food server Cindi Graeff got the full amount that Byrne owed her - $29,000 - in cash. That makes Graeff the only creditor Davis is aware of who's been paid off in full by either Byrne, Noriega or GSR Development.

The deadline for filing a claim against GSR was March 5.

Efforts to determine if Byrne would now be considered a member of the GSR unsecured creditors committee were unsuccessful.

 

Davis: GSR unsecured creditors have little chance of 'satisfaction'

Island businessman and GSR creditor Kent Davis said he has "lost confidence in the ability of the bankruptcy court or creditors committee to act effectively or fairly on behalf of small creditors" of GSR.

Davis, who at one time had a $600,000 judgment against GSR principals Robert Byrne and Steve Noriega (see separate story), said that when GSR first went into bankruptcy, he had gathered as many unsecured creditors as possible and asked U.S. Bankruptcy Court Trustee Theresa Boatner for inclusion on the creditors committee.

Boatner denied his request and had only one Islander named to the committee: Patricia Hart, who has since moved to Georgia. There are no Island residents currently on the unsecured creditors committee, although Island creditors have about $1.9 million in claims against GSR, approximately 33 percent of the unsecured claims total.

Davis said after he and other Islanders were excluded from the committee, he "encouraged" creditors with personal guarantees by Byrne and Noriega to seek "satisfaction outside the bankruptcy court."

Rather than file his claim with the bankruptcy court, Davis obtained judgments against Byrne and Noriega and eventually received property in Palm Beach County from Byrne and his wife, Arlene, for a "large chunk" of the debt. He's still owed about $120,000 from Byrne, he claimed.

Davis said he hasn't bothered filing an official claim with the bankruptcy court because "I do not believe that the court will give any satisfaction to anyone, aside from the lawyers and banks."

In other words, the unsecured creditors of GSR shouldn't hold their breath waiting for any money.

Davis added that he fully expects Byrne and Noriega to satisfy their outstanding debts to him.

In fact, he said, "Robert Byrne has never expressed any intention other than repaying what he owes. He has remained in the area, maintains an office location, and works every day to resolve these matters."

 

Island money

A number of Islanders and Island businesses have a considerable interest in the eventual liquidation of GSR's assets and distribution of any money. The following is a partial list of GSR's Island creditors and the amounts owed:

  • Betsy Hills Real Estate$690,000.
  • Mel and Carole Yudofsky$441,000.
  • LaPensee Plumbing$78,833.
  • Island Lumber$22,159.
  • Christian Huth$23,000.
  • City of Bradenton Beach$11,589.
  • Manatee County Tax Collector$103,000.

GSR creditors living in Tampa, Bradenton and the Palma Sola area include:

  • Robert and Diane Vildostiegui$707,212.
  • Fred and Phyllis Fechner$283,357.
  • Sherry Gray$66,354.
  • Kirk Pinkerton, P.A.$6,570.
Another creditor is Patricia Hart, formerly of Holmes Beach and now living in Georgia, who has a claim for $600,000 against GSR.

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