The corporate partners in the project to transform the downtown historic Gulfstream Hotel into an 87-room hotel with a downstairs restaurant, champagne room and rooftop sky bar continue to fight in court.
HH Gulfstream, a company run by developer Hudson Holdings, filed an amended motion Monday requesting that CDS Gulfstream close on selling its interests in HH Gulfstream, the company behind the $65 million hotel renovation project.
“We’re asking the courts to compel the defendants to meet their obligations under the buy/sell provision of the operating agreement,” J. Spencer Jenkins, the Fort Lauderdale attorney representing HH, told The Palm Beach Post. “We want them to come to the closing table and close the transaction as we believe they are obligated to do.”
CDS Gulfstream, run by south county developer Bill Milmoe, owns 51 percent of the project, with HH owning the other 49. CDS sued HH on Dec 22, claiming a breach of the operating agreement. CDS said HH failed to meet its obligations to close on the deal to buy the site on Dec. 20 and that HH had more than $2.9 million to close.
HH counter-sued Jan. 2, saying it had an agreement with CDS for a buy/sell provision.
CDS said HH was either unwilling or unable to buy CDS’s interest in the project. CDS added that Hudson told it on Oct. 20 that HH wanted to buy CDS’ interest and that CDS agreed to a closing date within 60 days, according to the complaint.
Eric J. Rayman, CDS’ Fort Lauderdale attorney, told The Post Thursday afternoon he had not received HH’s verified motion but was aware it was filed.
“Unfortunately we’re embroiled with a business partner who failed to live up to its contractual obligations,” Rayman said. “HH Gulfstream had neither the funds nor the approval required on the closing date to purchase CDS membership interest.”
Jenkins said the next step is to schedule a hearing to settle the issue. He said he had no idea when a hearing would occur. “It all has to do with the court’s calendar,” Jenkins said.
In court papers, HH said prior to the closing date, CDS attempted through counsel to exert “contractual” and “superfluous” conditions on HH before it closed the deal. HH said it repeatedly sought assurances that CDS would perform its obligations and close the transaction, but CDS failed to do that.
Also, just prior to the closing date, CDS asked for the first time a “proof of funds” for a price that had not yet been agreed to by both parties, court documents show. HH provided the proof twice.
HH said its funding source is a third-party investor group who have put up money to close the deal.
After CDS learned the money was coming from third parties and not HH, CDS became less cooperative in doing what was required to close the transaction, court records show.
HH said the investor group is “unsettled” by the matter and can not tie up money indefinitely. If the matter isn’t resolved immediately, the group will be forced to withdraw the funds, records show.