Funds claim adds to iSquare problems.
A developer with grand plans to build the $400 million iSquare Mall + Hotel on International Drive has been accused of commingling funds in a bankruptcy case, which the lender says was filed in a “lack of good faith.”
The lender is asking a judge to throw out the bankruptcy, which could allow it to seize the property where Abdul Mathin planned to build iSquare, at the corner of International Drive and Kirkman Road.
That would spell an end to Mathin’s iSquare plan, at least in that location. He had planned to demolish the 1980s-era International Shoppes retail center and build iSquare on the property.
The Delaware lender, Elizon DB, is objecting to the bankruptcy of International Shoppes, which is owned by Mathin.
Mathin had announced the iSquare plan in 2014, and has several times set a possible start date or said he is close to financing it. It’s on about 5 acres, on the other side of Interstate 4 from Universal Orlando, only a mile away as the crow flies.
If the case isn’t thrown out, Elizon is asking that the case be converted to a Chapter 7 liquidation, which would put a trustee in charge of International Shoppes and allow for closer inspection of its books.
Elizon claims it loaned $14.3 million to International Shoppes under narrow restrictions. The money wasn’t to be commingled with other companies, and all rent payments from tenants at International Shoppes were supposed to be retained by the shopping mall and used to pay back the loan, according to Elizon’s court filings.
Instead, the lender accuses Mathin’s company of depositing those rents into accounts for his main company, BlackMINE Group, which is the company that would build iSquare.
“This case involves what is clearly a classic two-party dispute between Elizon and [International Shoppes], which is adequately and more appropriately resolved in the state court foreclosure proceeding,” attorneys for Elizon said.
At the same time, another shopping center owned by Mathin, Avenue Shoppes LLC, also filed for bankruptcy under similar circumstances.
While International Shoppes was redirecting rent payments from the retail center, it was also incurring “significant … accounts receivable, much of which it now claims is uncollectable,” lawyers for Elizon said in a motion to convert the case.
BlackMINE’s corporate attorney Scott Goldstein said in early December that “International Shoppes’ decision to file for Chapter 11 bankruptcy will have no effect on the development of iSquare.”
Goldstein also claimed at that time the company was lining up funding for the massive project, and had a letter of commitment from a lender. Neither he nor Mathin could be reached Friday for comment.
Goldstein has sought court permission to be the bankruptcy
attorney for International Shoppes, but that also drew criticism from Elizon’s attorneys, who claim in court filings that Goldstein can’t represent both BlackMINE, which is named as a creditor in the case, and International Shoppes.
Mathin had planned for at least 31 stories, with a five-star hotel and another boutique hotel, shopping and other amenities. But the project met with skepticism from many, said Duncan Dickson, associate professor at Rosen College of Hospitality. For one thing, the area is characterized by fast-food restaurants, bars and souvenir shops.
“Access to that site was always a problem. The height of the hotel was outsized for that area, and he wanted a five-star hotel in an area that isn’t five stars,” Dickson said.
Winter Park court battle
In other business news, two Winter Park couples are locked into a legal battle over their real-estate company and several homes it owns.
David and Caroline Croft are accusing Selven and Vanessa Pursooramen of using funds from their jointly owned business, Infinity Homes, according to a lawsuit in Orange County Circuit Court. The Pursooramens claim that there’s no proof of the allegations and the case should be thrown out, according to a motion to dismiss the lawsuit.
After a year of litigation, the Crofts have filed a Chapter 11 bankruptcy on Infinity Homes and plan to hire someone to sell six homes the company had started building.
Infinity was founded in 2016, and currently has seven homes under development. The Crofts’ lawsuit claimed that they had pumped $1.4 million into the company, only to realize the Pursooramens hadn’t contributed anything and were using some of Infinity’s money to buy homes under Selven Pursooramen’s other company, Signature Worldwide Homes. They also accuse the Pursooramens of holding up the sale of some homes and of using Infinity money to pay other expenses.