Bid for bankrupt project

The stalled Las Olas Ocean Resort nears sale.

FORT LAUDERDALE —The stalled Las Olas Ocean Resort near Fort Lauderdale Beach may be close to being sold to a Rhode Island hospitality company after it became the only bidder to make an offer for the property, which is in Chapter 11 bankruptcy proceedings.

The bidder, MHF Properties VI LLC, is an affiliate of Magna Hospitality Group of Rhode Island. The company had agreed to put up the initial offer for an auction that was to take place under the supervision of the U.S. Bankruptcy Court.

But after MHF offered $39.1 million, the auction was called off when no one offered a competing bid.

Debtor attorney Glenn Moses, of the Miami law firm of Genovese Joblove & Battista P.A., said the sale is expected to be approved Friday by U.S. Bankruptcy Judge Raymond B. Ray in Fort Lauderdale.

Moses also said Magna would likely resume construction “as soon as possible.”

The troubled project covers multiple addresses near the Fort Lauderdale Swimming Hall of Fame. A 34,299-square-foot lot spans 550 Seabreeze Blvd. and 525 S. Fort Lauderdale Beach Blvd. A parking lot is at 515 Seabreeze Blvd.

Construction on the 12-story, 136-room resort ground to a halt after 550 Seabreeze Development LLC sought protection from its creditors — namely Bancorp Bank — which filed a foreclosure suit against the owner in January. The bank claimed the developer defaulted on a mortgage, which had an unpaid balance of $36.9 million.

In court, 550 Seabreeze blamed damage from September’s Hurricane Irma for its troubles and listed $50.6 million in debts when it sought Chapter 11 protection in February.

It remains unclear whether several dozen investors from China will recover anything. Collectively, they contributed $30 million through a U.S.-sponsored foreign investor program that would have yielded immigration visas as a reward for creating jobs at the resort.

About a third of them filed a lawsuit in bankruptcy court alleging fraud by Bancorp and four of the developer’s managing members.

In a court motion, Moses has argued that none of them should be regarded as creditors.