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Developer files for bankruptcy

The company building 23 homes says money isn't its main problem.

Published May 11, 2007


SEMINOLE - A local developer of a gated subdivision has asked a federal bankruptcy court for protection while a dispute among the corporation's shareholders is worked out.

The Boca Ciega Corp., which is building 23 homes at 10803 54th Ave. N, filed for Chapter 11 bankruptcy in January. Among other things, the company's president, Gay Varano, is asking that the corporation be reorganized.

Clearwater lawyer Michael Markham, who is handling the bankruptcy, said, "The Boca Ciega situation is kind of unique."

The corporation did not declare bankruptcy because there is not enough money to pay the creditors. The bankruptcy is designed to allow the corporation to continue selling property while a dispute between the shareholders is ironed out.

"It's more legal issues than financial distress," Markham said.

One of the shareholders is the person who financed the original purchase of the land. Among the issues, Markham said, is how much that shareholder should be paid when lots are sold.

If those issues can be ironed out, Boca would exit bankruptcy quickly, he said. As it is, the company expects to be out of the court system in the next few months.

Papers filed with the U.S. Bankruptcy Court for the Middle District of Florida show that the corporation's main asset is the land, which is slated to become the Boca Ciega Club. The property is valued at $4.2-million. The corporation's debts total about $2.4-million, according to the court records.

Even though the company has filed for bankruptcy protection, Boca Ciega continued to operate and has sold at least three lots since filing for reorganization. The court has allowed the sale of those lots and has removed any liens covering them so the buyers will have no fear of future problems.

Company officials intend to continue selling lots and have scheduled an open house from 11 a.m. to 3 p.m. Saturday at the property.

[Last modified May 10, 2007, 23:42:40]

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