Palm Greens at Villa Del Ray Recreation Condominiu

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
WEST PALM BEACH DIVISION
In re:
PALM GREENS AT VILLA DEL RAY 	Case No. 26-11060-EPK
RECREATION CONDOMINIUM 	Chapter 11
ASSOCIATION, INC.,
Debtor.
_______________________________________/
ORDER DENYING MOTION FOR STAY PENDING APPEAL
Interested party Number 1 Condominium Association – Palm Greens at Villa
Delray, Inc. ("Condo 1") filed a Motion for Stay Pending Appeal or Alternatively Under
Bankruptcy Rule 6006(d) Regarding Order Assuming Contracts and Allowing Fees [Dkt. No.
239; the "Motion"]. Condo 1 seeks a stay pending appeal of this Court's Order Granting
Trustee's Motion to Assume Executory Contracts [Dkt. No. 229].
The Court requested responses to the Motion and set a hearing but advised the
parties that the hearing may be canceled after the Court reviewed filed responses. Dkt. No.
241. The Court carefully reviewed the Motion and responses. Dkt. Nos. 256, 266, 268, 271,
Erik P. Kimball
United States Bankruptcy Judge
_____________________________________________________________________________
ORDERED in the Southern District of Florida on June 17, 2026.
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and 272. In light of the detailed presentation in the Motion and responses, a hearing is not
necessary.
Summary of Ruling
The chapter 11 trustee, an experienced fiduciary, asked this Court to approve the
assumption of executory contracts at the center of administration in this chapter 11 case.
Under applicable law, the Court must determine only whether the trustee exercised
reasonable business judgment in assuming the contracts. The trustee must assume the
contracts to complete reconstruction of the debtor's primary asset, a recreation complex
maintained for the benefit of hundreds of homeowners. The reconstruction project has been
embroiled in litigation for years, mostly instigated by the debtor. The counterparty on the
contracts, a national developer, is ready, willing, and able to complete the project in
cooperation with the trustee. The trustee carefully considered the relevant circumstances
and exercised his discretion to assume the contracts.
Condo 1 is controlled by a person who, with others, doomed the debtor to bankruptcy
by causing it to pursue costly, unnecessary, and mostly unsuccessful litigation against
numerous parties including the developer. The same person led the debtor during the first
part of this chapter 11 case and likely is responsible for the debtor’s actions which caused
the Court to appoint a chapter 11 trustee.
Condo 1 objected to assumption. Contrary to the summary process applicable to
assumption of executory contracts as provided in binding 11th Circuit precedent, Condo 1
sought to litigate specious claims relating to the contracts, most of which were negated by
pre-bankruptcy state court rulings that remain binding on the debtor and Condo 1. The
Court overruled Condo 1's objection and, finding that the trustee exercised reasonable
business judgment, approved assumption of the contracts.
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Condo 1 appealed and now seeks a stay pending appeal. In light of the Bankruptcy
Code and overwhelming case law, the appeal is futile. Condo 1 has no chance of success in
the appeal. The harm absent a stay alleged by Condo 1 does not flow from the order under
appeal, is speculative and undefined, or otherwise does not constitute irreparable injury. In
contrast, the estate, residents, and the developer are injured by further delay in completing
the project and by preventing the estate from paying the developer for its ongoing
management services which benefit the estate and hundreds of residents. The public
interest does not support standing the usual summary process on its head and permitting
Condo 1 to bring the administration of this case to a halt. To the contrary, the public
interest supports allowing the trustee to complete the debtor's recreation complex and
allowing the trustee to manage the bankruptcy estate consistent with his reasoned business
judgment and extensive experience.
As more fully explained below, the Motion will be denied.1
Background
The debtor in this chapter 11 case, Palm Greens at Villa Del Ray Recreation
Condominium Association, Inc., was formed to own and operate a substantial recreation
complex for use by two large 55-plus condominium communities. Condo 1 is one of those
communities. The other is Palm Greens at Villa Del Ray, Condo 2 Association ("Condo 2").
Equal numbers of representatives from Condo 1 and Condo 2 constitute the debtor’s board. 2
1 In support of the Motion, Condo 1 asked the Court to take judicial notice of five documents [Dkt. No.
240]. The Court considered that request, written responses to it, and presentations of counsel at a
hearing, and entered an order denying that request [Dkt. No. 253]. Even if the Court granted Condo
1's request for judicial notice and considered the proposed documents, the Court's ruling on this Motion
would not change.
2 At the time this case was filed, the debtor's board was not so composed. However, at present the
debtor is controlled solely by the chapter 11 trustee.
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The original recreation complex owned and operated by the debtor was substantial.
It included a large clubhouse with various amenities, a resort style swimming pool and hot
tub, and extensive sports facilities spanning several acres. The entirety of the original
recreation complex was located on real property owned by the debtor.
In 2019, the debtor entered into agreements with 13FH Palm Beach, LP ("13FH")
including a Development Agreement and its incorporated Temporary Management
Agreement. 13FH had acquired a former golf course located adjacent to the debtor's
property. 13FH intended to build a substantial townhouse community on part of the former
golf course, to be named Delray Trails. Under the Development Agreement, among other
things, the debtor granted 13FH construction and permanent access easements to permit
13FH access to its new residential development and 13FH agreed to make substantial up-
front payments to the debtor. In addition, 13FH agreed to reconstruct the debtor's existing
recreation complex for use by residents of Condo 1, Condo 2, and Delray Trails. The agreed
reconstruction included demolition of the existing clubhouse and swimming pool,
construction of a new clubhouse and swimming pool complex on real property owned by
13FH, and improvements to the sports amenities on the debtor's real property. Under the
Temporary Management Agreement, for the period between opening of the new clubhouse
and turnover of the Delray Trails association to homeowners in that project, 13FH agreed
to operate the debtor's recreation complex for a monthly fee payable by the debtor, which
the debtor would collect from Condo 1 and Condo 2.
Prior to construction of the new recreation complex or the Delray Trails project,
13FH sold substantially all the affected real property to Lennar Homes, LLC ("Lennar").
Then Lennar began reconstruction of the recreation complex and development of Delray
Trails.
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Disputes arose among Lennar, the debtor, and Condo 1. The debtor and Condo 1
filed suit against Lennar, 13FH, and related parties in the Circuit Court of the Eleventh
Judicial Circuit in and for Miami-Dade County, Florida. 3 They alleged that Lennar and
13FH breached the Development Agreement by, among other things, starting construction
of Delray Trails without first starting vertical construction on the new recreation complex.
After two amendments to the original complaint in the Miami-Dade action, that
court entered orders dismissing the operative amended complaint with prejudice. In
dismissing the action as to Lennar with prejudice, the Miami-Dade court ruled that when
Lennar acquired the subject real property from 13FH "Lennar inherited the rights and
obligations under the Development Agreement to develop the Recreation Campus, which
run with the land. 13FH's rights and obligations under the Development Agreement were
freely assignable; the Development Agreement expressly references 13FH's 'successors and
assigns.'" (emphasis added.)
In dismissing the action as to 13FH with prejudice, the Miami-Dade court ruled in
detail on the issue of assignment of the Development Agreement to Lennar. The Miami-
Dade court ruled that Lennar is the successor to 13FH under the Development Agreement
based on two separate conclusions.
First, the Miami-Dade court determined that the obligations of the parties under the
Development Agreement are covenants running with the land, not personal obligations,
and "accordingly, the obligations thereunder rest with the owners of the subject properties,
not its predecessors." In support of this conclusion, the Miami-Dade court quoted from the
Development Agreement itself, which states that the "benefits and burdens of each
covenant set forth in this Agreement shall run with the title to the Property and the
3 As Condo 1, the debtor, and the reconstruction project are in Palm Beach County, it is unclear why
the debtor and Condo 1 commenced suit in Miami-Dade County.
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Recreation Association Property and shall bind or benefit the record title owners thereof,
their respective successors, successors-in-title, and assigns." In other words, the Miami-
Dade court ruled that all aspects of the Development Agreement are binding on the debtor
and its property (identified as the "Recreation Association Property") as well as on Lennar,
as the successor to 13FH, and Lennar's property.
Second, the Miami-Dade court ruled that because the Development Agreement
expressly contemplates an assignment or sale by 13FH to a successor, that the assignment
of the Development Agreement from 13FH to Lennar was accomplished by the sale of the
subject property to Lennar. The Miami-Dade court further ruled that the assignment of the
rights and obligations under the Development Agreement by 13FH to Lennar did not
require a written amendment to the Development Agreement. The court ruled that under
the terms of the Development Agreement 13FH could assign the agreement to any third
party, that 13FH's "rights and obligations were freely assignable", and that the assignment
did not require a writing.
The Miami-Dade court dismissed the suit against 13FH without further ability to
amend.
In the Miami-Dade action, the claims against Lennar centered on the argument that
Lennar failed to commence vertical construction on or complete the new recreation complex
prior to issuance of vertical building permits for residential units in Delray Trails. The
Miami-Dade court ruled that the Development Agreement does not require Lennar to
commence vertical construction on or to complete the recreation complex prior to moving
forward with its own residential development. The court also ruled that Lennar had
commenced construction of the recreation complex before permits were issued for its new
residential units, thus satisfying the timing requirements of the Development Agreement.
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The Miami-Dade court authorized the plaintiffs to file an amended complaint solely
against Lennar if they wished to pursue breach of contract claims under sections 4, 5,
and/or 6 of the Development Agreement. 4 These are provisions regarding the construction
of landscape buffers, walking trails, and the clubhouse and related amenities. Instead, the
debtor and Condo 1 filed an appeal from the Miami-Dade court's orders dismissing the
action with prejudice.
The Miami-Dade court also ruled that both Lennar and 13FH "are entitled to an
award of reasonable attorneys' fees pursuant to the Development Agreement, upon which
Plaintiffs premised their claims." The court thus confirmed that the debtor remains subject
to the fee shifting provisions of the Development Agreement, among all the other provisions
of the agreements.
Then the debtor and Condo 1 filed a complaint against Lennar and related parties in
the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida.
In that second action, the debtor and Condo 1 again argued that Lennar had failed to
commence vertical construction on or complete the new recreation complex before beginning
construction of its new residential community. This is the same claim that was dismissed
with prejudice in the Miami-Dade suit.5 Noting that the complaint before it "mirrors in
most material respects the Third Amended Complaint filed in the Underlying Case in
Miami-Dade County and contains many allegations that were disposed of by the Miami-
4 By preserving this right, the Miami-Dade court inherently ruled that any amended complaint would
be based on breach of contract, meaning the court further acknowledged the applicability of the
Development Agreement as an agreement binding in general on the parties.
5 Contrary to Condo 1's present argument that the Development Agreement is not binding on Lennar
as a whole, Condo 1 and the debtor allege in the Palm Beach County complaint that the Development
Agreement "is a valid and binding contract in the State of Florida" and then state general breach of
contract claims against Lennar as the successor under the Development Agreement. Nowhere in the
Palm Beach County complaint does Condo 1 suggest that Lennar is somehow bound only by the
development obligations under the Development Agreement but lacks any rights under the
Development Agreement.
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Dade County court," the Palm Beach County court transferred venue of the matter to the
Miami-Dade court. The debtor and Condo 1 appealed that order as well. The transfer
order was recently affirmed on appeal.6
The debtor filed a voluntary chapter 11 petition on January 28, 2026. Dkt. No. 1. At
that time, the debtor was involved in 21 lawsuits and appeals, including the Miami-Dade
and Palm Beach litigation with Lennar. Dkt. No. 42 (pages 36-40). The debtor was a
primary and active party in at least 12 of those matters. In addition, the debtor was
actively involved in and financing certain actions in which it was not a party including a
defamation suit brought by one of its former board members against other individuals. The
expense of these many lawsuits brought the debtor to this Court.
The debtor's aggressive litigation strategy continued after it filed its petition here.
The debtor removed three state court actions to this Court. Adv. Proc. Nos. 26-01056, 26-
01065, and 26-01071. This included the defamation action to which the debtor was not a
party but that the debtor was funding, and a purported class action in which the debtor
could not be a party. The Court remanded each of those suits.
Lennar completed construction of the new clubhouse, pools, and related facilities, on
real property owned by Lennar. That component of the updated recreation complex opened
to residents on January 30, 2026, two days after this bankruptcy was filed. Residents of
Condo 1 and Condo 2 have been using those facilities.
Lennar filed a motion asking the Court to compel the debtor to either assume or
reject the Development Agreement and incorporated Temporary Management Agreement.
Dkt. No. 77. Condo 2 partially joined Lennar's motion. Dkt. No. 93. After consideration of
responses filed and arguments made at a hearing, at which the Court made a detailed oral
6 The chapter 11 trustee now controls the debtor’s involvement in that appeal and is unlikely to pursue
further relief.
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ruling, the Court directed the debtor to file a motion to assume or reject the agreements by
a stated deadline. Dkt. No. 107. Among other things, the Court ruled that the
Development Agreement and the Temporary Management Agreement are executory
contracts within the meaning of 11 U.S.C. § 365, and that the Development Agreement and
the Temporary Management Agreement constitute an integrated agreement that must be
assumed or rejected as a unit. The Court ruled that the debtor did not have the ability to
insist that Lennar perform under the agreements, at substantial cost to Lennar, but the
debtor not also be bound by the agreements. The Court's order at Dkt. No. 107 was not
appealed.
Condo 2 filed a motion asking the Court to appoint a chapter 11 trustee in this case.
Dkt. No. 114. Lennar joined in that motion and independently asked the Court to appoint a
chapter 11 trustee. Dkt. No. 132. The United States Trustee supported the appointment of
a trustee. The Court held a hearing, delivered a detailed oral ruling, and directed the
United States Trustee to appoint a chapter 11 trustee in this case. Dkt. No. 148. Among
other things, the Court found that the debtor's actions in this chapter 11 case were marked
by a distinct lack of honesty and forthrightness, beginning essentially on the date the
petition was filed. The Court noted troubling conflicts of interest in the management of the
debtor, including that the debtor may have claims for breach of fiduciary duty against its
own acting board for their use of the debtor's assets to fund litigation for the benefit of
others. The Court decried the debtor's attempt to use this Court as the forum to continue
the prohibitively expensive litigation crusade that caused it to file the petition in the first
place, rather than use the bankruptcy case to extract itself from that so-far unproductive
litigation. The Court found that the debtor's operations pre-bankruptcy and the conduct of
its bankruptcy case were rife with incompetence and gross mismanagement. These are just
some of the findings the Court made at that time.
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The United States Trustee appointed Robert Furr as chapter 11 trustee in this case,
Mr. Furr accepted the appointment, and the Court confirmed that selection. Dkt. Nos. 150,
151, and 158. Mr. Furr is a lawyer with decades of experience as a chapter 7 and chapter
11 trustee, having acted in such capacities in thousands of cases. He also has extensive
experience representing debtors-in-possession in chapter 11 cases, including experience
with associations such as the debtor.
After an extension of the deadline approved by the Court, the chapter 11 trustee
filed a motion to assume the Development Agreement and incorporated Temporary
Management Agreement. Dkt. No. 170. The Court considered several joinders and
responses and held a hearing on May 6, 2026. At that hearing, the Court made a detailed
ruling on the record and then entered an order authorizing the chapter 11 trustee to
assume the Development Agreement and the incorporated Temporary Management
Agreement. Dkt. No. 229.
Condo 1 had objected to the trustee's motion to assume the agreements. Among
other things, Condo 1 argued that Lennar had not proven that it is the assignee of 13FH
and so Lennar is not the counterparty to the agreements. In its ruling, this Court stated
that the Miami-Dade court had already ruled in a binding way that Lennar is the
counterparty and that 13FH has no remaining obligations under the Development
Agreement or the Temporary Management Agreement. The Court ruled that the Miami-
Dade court’s orders are binding on the debtor and Condo 1, which was a party to the suit.
The Court ruled that there was no question that the trustee exercised reasonable business
judgment in assuming the agreements as that was the only reasonable decision under the
circumstances of this case.
In connection with assumption of the agreements, Lennar sought cure of defaults in
the form of payment of overdue amenity use fees under the Temporary Management
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Agreement, attorneys' fees ordered in the Miami-Dade litigation, fees incurred in the
related appeals, and fees incurred in this bankruptcy case, all under the Development
Agreement's fee shifting provision.7 Because the debtor was unable to pay all such sums at
the time of assumption, the trustee and Lennar agreed that the estate would pay ongoing
monthly fees under the Temporary Management Agreement and that the remainder of the
debtor's monetary cure obligations would be accorded administrative expense status with
the timing of payment to be addressed at a later time, likely in connection with plan
confirmation. Lennar also sought adequate assurance of future performance in the form of
assurance of certain performance obligations by the debtor. Each of these cure and
adequate assurance items is addressed in the Court's order, which states that the
determination of certain cure amounts and adequate assurance are "subject to future
negotiation between the Trustee and Lennar." This agreement between the trustee and
Lennar allows the estate to obtain the benefit of the Development Agreement and
Temporary Management Agreement without the need to provide immediate full cure of
past monetary defaults.
Condo 1 appealed the Court's order authorizing the trustee to assume the
agreements. Dkt. No. 234.8 The present Motion seeks a stay of that order pending appeal.
7 If the debtor is in default on a contract to be assumed, the trustee must cure or provide adequate
assurance that the trustee will promptly cure the default or the trustee cannot assume the contract.
The trustee must compensate or provide adequate assurance that the trustee will promptly
compensate another party to the contract for actual pecuniary loss resulting from the default. And
the trustee must provide adequate assurance of future performance under the contract. 11 U.S.C. §
365(b)(1).
8 This is one of five appeals filed in this bankruptcy case. See Dkt. Nos. 165, 166, 167, 191, and 234.
Although the first three such appeals were filed in the name of the debtor after the trustee was
appointed, Condo 1 filed the last two. The Court notes that the same individual acted as the client
contact for the debtor prior to appointment of the trustee and now acts as the client contact for Condo
1. That individual is among those subject to the trustee's investigation of claims that may be pursued
on behalf of the bankruptcy estate.
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Stay Pending Appeal in Bankruptcy Matters
Unless stayed, orders and judgments entered by this Court are immediately
enforceable upon entry. Even if an appeal is filed, absent a stay the prevailing party or
parties may treat the order or judgment as final. Under the Bankruptcy Rules9, certain
orders and judgments are automatically stayed for a specified period. Execution on
judgments is stayed for 14 days under Bankruptcy Rule 7062, and certain other orders are
stayed for 14 days under Bankruptcy Rules 3020, 4001, 6004, and 6006. In each such case,
the period of stay may be reduced or eliminated by the Court, either under the specific rule
providing for the stay or under Bankruptcy Rule 9006(c). If there is no such automatic
period of stay applicable to an order or judgment, or if such period has been eliminated or
has expired, the non-prevailing party or parties must seek a stay in order to stop
enforcement of, or action consistent with, the order or judgment.
Bankruptcy Rule 7062, incorporating Civil Rule 62, is not applicable to the order
under appeal. When applicable, a party seeking a stay of judgment under Bankruptcy Rule
7062, incorporating Civil Rule 62, may obtain a stay upon posting of a bond or other
security in an amount, and with conditions, satisfactory to the Court. In other words, in
most cases where Bankruptcy Rule 7062 applies the appealing party has a right to entry of
a stay upon posting the bond required by the Court.
In this matter, Bankruptcy Rule 8007 alone governs the potential issuance of a stay
pending appeal. Unlike Bankruptcy Rule 7062 and Civil Rule 62, Bankruptcy Rule 8007
does not provide for the granting of a stay as of right upon the filing of a sufficient
supersedeas bond. Collier on Bankruptcy ¶ 8007.06 (Richard Levin & Henry J. Sommer
eds., 16th ed.). The determination of whether to grant a stay pending appeal is left to the
9 In this order, the term “Bankruptcy Rule” refers to the applicable Federal Rule of Bankruptcy
Procedure, and the term “Civil Rule” refers to the applicable Federal Rule of Civil Procedure.
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discretion of the Court. If a stay pending appeal is warranted, the Court may condition the
stay on the posting of " bond or other security." Fed. R. Bankr. P. 8007(a)(1)(B). The bond
or security is intended to protect the opposing party or parties, which may include the
bankruptcy estate generally, against loss that may be sustained as a result of a failed
appeal. Because there is no stay pending appeal as of right under Bankruptcy Rule 8007,
the Court must first determine whether a stay is warranted and, if so, determine whether a
bond or other security will be required as a condition of the stay.
Ordinarily, the appellant must first seek a stay from this Court and, if unsatisfied,
may seek relief from the District Court in which its appeal is lodged. Fed. R. Bankr. P.
8007. "Failure to first seek a stay or other relief in the bankruptcy court will ordinarily
deprive the district court or appellate panel (or the court of appeals in the case of a direct
appeal) of jurisdiction over a motion seeking a stay." Collier on Bankruptcy ¶ 8007.05
(citations omitted); Rodriguez v. ALS Commer. Funding, LLC, No. 19-20452, 2019 U.S.
Dist. LEXIS 29651 (S.D. Fla. Feb. 21, 2019); In re Rivera, No. 15-04402, 2015 U.S. Dist.
LEXIS 151860 (N.D. Cal. Nov. 9, 2015).
"A stay pending appeal is an 'extraordinary remedy' and the party seeking it must
show: '(1) a substantial likelihood that they will prevail on the merits of the appeal; (2) a
substantial risk of irreparable injury to the[m] unless the [stay] is granted; (3) no
substantial harm to other interested persons; and (4) no harm to the public interest.'" Woide
v. Fannie Mae (In re Woide), 730 F. App'x 731, 737 (11th Cir. 2018) (quoting Touchston v.
McDermott, 234 F.3d 1130, 1132 (11th Cir. 2000) and citing In re Revel AC, Inc., 802 F.3d
558, 568 (3d Cir. 2015)).
Condo 1 Has No Chance of Success in the Appeal
Condo 1 must show it is substantially likely to prevail on the merits of its appeal
from this Court's order authorizing the trustee to assume the Development Agreement and
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the incorporated Temporary Management Agreement. Under the circumstances of this
case, Condo 1 has no likelihood of success in the appeal.
In the Motion, Condo 1 argues that the Court's order rests on "two disputed
premises: first, that certain personal or service rights run with the land; and second, that
Lennar may enforce assignment-dependent rights without proving the assignment." In
other words, Condo 1 argues that (a) only certain components of the Development
Agreement are covenants running with the land and that absent assumption Lennar does
not have the benefit of the remainder of the Development Agreement, and (b) because
Lennar has not produced a formal assignment document it cannot be considered a party to
the Development Agreement.
Condo 1's primary arguments suffer from two weaknesses. First, Condo 1's
opposition to the trustee's motion to assume the agreements, and the present Motion,
exhibit a lack of understanding of the treatment of executory contracts in bankruptcy
including the role of the trustee in determining whether to assume or reject an executory
contract and the role of the Court in ruling on motions to assume or reject executory
contracts. Second, Condo 1's arguments are contrary to the rulings of the Miami-Dade
court which rulings are binding on both the debtor and Condo 1.
Section 365(a) permits a trustee, subject to court approval, to assume or reject an
executory contract or unexpired lease of the debtor. The trustee has only two choices: the
trustee may assume an executory contract or the trustee may reject an executory contract.
The trustee has discretion to decide whether to assume or reject, subject only to court
approval. Byrd v. Gardinier, Inc. (In re Gardinier, Inc.), 831 F.2d 974, 975 n.2 (11th Cir.
1987).
Courts "review a trustee's decision to assume or reject a contract under a traditional
'business judgment' standard" and so the "scope of review . . . is narrow." Id. The trustee
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cannot pick and choose portions of contracts to assume or reject. See Thompkins v. Lil' Joe
Records, Inc., 476 F.3d 1294, 1306 (11th Cir. 2007) ("It is true that a debtor must either
assume an executory contract in its entirety or completely reject it…."); see also Collier on
Bankruptcy ¶ 365.03 (Richard Levin & Henry J. Sommer eds., 16th ed.).
Assumption of an executory contract permits both parties to enforce the contract in
full. But rejection of an executory contract is not an outright dissolution of the contract.
Thompkins, 476 F.3d at 1306. A rejected contract does not disappear; it continues to exist.
It is "not cancelled, repudiated, rescinded, or in any other fashion terminated." Id. (citation
omitted). Rejection of an executory contract constitutes a breach of the agreement by the
debtor. 11 U.S.C. § 365(g). In this case, the breach would be deemed to have occurred
immediately before the petition date. 11 U.S.C. § 365(g)(1). After rejection, the
counterparty may file a claim in the bankruptcy case for damages resulting from rejection.
11 U.S.C. § 502(g).
In reviewing a motion to assume or reject an executory contract, courts do not
adjudicate disputed aspects of the contract. "[A] motion to assume should be considered a
summary proceeding, intended to efficiently review the trustee's or debtor's decision to
adhere to or reject a particular contract in the course of the swift administration of the
bankruptcy estate. It is not the time or place for prolonged discovery or a lengthy trial with
disputed issues." Orion Pictures Corp. v. Showtime Networks (In re Orion Pictures Corp.), 4
F.3d 1095, 1098-99 (2d Cir. 1993). The Court does not exercise its own business judgment
or engage in extensive analysis of the contract. "[A] bankruptcy court sits as an overseer of
the wisdom with which the bankruptcy estate's property is being managed by the trustee or
debtor-in-possession, and not, as it does in other circumstances, as the arbiter of disputes
between creditors and the estate." Id. at 1099. Section 365 does not authorize courts "to
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resolve questions involving the validity of contracts before deciding whether to permit the
trustee or debtor-in-possession to assume the contracts." Id.
Here, the trustee in his discretion determined that assuming the Development
Agreement and incorporated Temporary Management Agreement most benefited the
estate. The trustee determined to assume those agreements so the debtor may obtain its
bargained-for updated recreation complex and so the residents of Condo 1, Condo 2, and
Delray Trails can enjoy those amenities. The trustee determined that rejecting the
agreements was not more beneficial to the estate. Based on the circumstances of this case,
the Court agreed that the trustee's decision to assume the agreements was well within his
discretion.
At the time the trustee sought to assume the agreements, the debtor was in default
as the debtor had failed to pay several months of fees due under the Temporary
Management Agreement and the debtor was liable for legal fees and expenses under the fee
shifting provisions of the Development Agreement, including legal fees and expenses
awarded in the Miami-Dade litigation but which had not yet been liquidated. As discussed
above, the trustee negotiated a favorable arrangement with Lennar, delaying liquidation
and payments of those sums, which agreement is incorporated in the Court's order
authorizing assumption.
Condo 1 challenges the trustee's determination to assume the agreements based in
part on the false understanding that if the agreements were rejected Lennar would still
have to perform its obligations under the Development Agreement but would not retain any
of its rights under that agreement, apparently including permanent easements previously
granted for access to Delray Trails and the new clubhouse complex. In support of this
argument, Condo 1 posits that only parts of the Development Agreement constitute
covenants running with the land, which Condo 1 believes would remain effective vis-a-vis
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Lennar even if the agreements were rejected, and that after rejection of the agreements the
debtor could nevertheless force Lennar to complete construction but could deny Lennar
access across the debtor's property. Although not stated, it appears that Condo 1's
intention would be to extort concessions from Lennar. But the estate cannot reject the
burdens of the agreements yet keep the benefits. See Thompkins v. Lil' Joe Records, Inc.,
476 F.3d 1294, 1306 (11th Cir. 2007).
In the context of the present Motion and the appeal itself, Condo 1's arguments fail
for two reasons. First, even if Condo 1 were correct, and they clearly are not, there is no
reason for the trustee to subject this bankruptcy estate to substantial risk of failure and
expense by pursuing rejection of the agreements. The trustee, a true neutral with
extensive relevant experience, thoroughly investigated the facts and circumstances of this
case. He reviewed the Development Agreement and Temporary Management Agreement;
considered pleadings and orders in this case and in the several state court matters
involving the debtor, Lennar, Condo 1, Condo 2, and other parties; met with representatives
of the association boards and the facilities manager; met with homeowners; toured the old
and new facilities and amenities; and negotiated with Lennar's counsel and representative.
Based on his review of the circumstances, it is well within the trustee's discretion to
determine that the estate is favored by assumption of the agreements, in toto, rather than
attempt to reject the agreements and continue with what would undoubtedly be extended
and expensive litigation that the bankruptcy estate cannot afford to fund. The Court
pointed this out in granting the trustee's motion to assume. Put another way, even if
Condo 1 could be right, the trustee is not required to take the litigation risk or cause the
estate to suffer the cost and delay.
Second, Condo 1 ignores the breadth of the Miami-Dade court's rulings, summarized
above. Condo 1's arguments here are precluded by that court's ruling that Lennar is the
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assignee of 13FH's rights and obligations under the Development Agreement not only based
on a covenant running with the land analysis, but also based on the fact that the
Development Agreement, by its own terms, is freely assignable and no written amendment
was required. 10 Even if the Miami-Dade court's rulings had been based solely on the
determination that the Development Agreement is a covenant running with the land, that
court made clear that it considered the entirety of the agreement and that the agreement is
binding as a whole on both sides.11
Some of Condo 1's arguments in the Motion are craftily presented and appear to be
purposely deceptive.
Condo 1 argues that the Court's order "gives practical effect to an assignment of
rights though the assignment agreement has never been produced or entered into
evidence." Condo 1 states that Lennar "claims rights through an unproduced assignment."
This is simply false. There is no "missing assignment." Lennar has not argued that there
is a separate assignment document. The Miami-Dade court already ruled on this issue in
favor of Lennar, that ruling is binding on the debtor and Condo 1, and this Court agrees
with that ruling. But even if there was no such ruling, under the circumstances of this case
it is appropriate for the trustee to exercise his discretion to accept Lennar as the obvious
10 Issue preclusion applies in bankruptcy proceedings. This Court applies the preclusion law of Florida
since the ruling at issue was rendered by a Florida state court. See St. Laurent v. Ambrose (In re St.
Laurent), 991 F.2d 672, 675-76 (11th Cir. 1993). Florida law precludes litigation where the parties
and issues are identical, the matter at issue was fully litigated, and a court of competent jurisdiction
renders a final decision. Harris v. Jayo (In re Harris), 3 F.4th 1339, 1345 (11th Cir. 2021) (citations
omitted). Under Florida law, a judgment entered by a court of competent jurisdiction has preclusive
effect notwithstanding a pending appeal unless an appellate court tries the case de novo.
CCB, LLC v. BankTrust, 552 F. App'x 963, 965 (11th Cir. 2014) (citing Reese v. Damato, 33 So. 462,
464 (Fla. 1902)).
11 As stated in its ruling on the trustee's motion to assume, this Court agrees that Lennar is the sole
existing counterparty to the Development Agreement and the integrated Temporary Management
Agreement.
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assignee of 13FH and negotiate the assumption with Lennar to avoid the cost of
unnecessary, costly, and likely unsuccessful litigation.
Likewise, Condo 1 argues that the prevailing party fee provision in the Development
Agreement is not a covenant running with the land, and that the acknowledgement in this
Court's order that Lennar has the right to collect legal fees amounts to this Court ruling
that the fee provision is enforceable as a covenant running with the land. First, the Miami-
Dade court awarded fees to Lennar under the fee shifting provision of the Development
Agreement, so there is already a ruling binding on the debtor and Condo 1. Second, when
the trustee assumes an executory contract all unpaid monetary obligations of the debtor
under that contract must be cured. The provision of this Court's order addressing fees
owing to Lennar by the debtor is simply a reflection of the requirements established by
Congress in the Bankruptcy Code. The trustee did not have the option of assuming the
agreements but not paying what they require.
Condo 1's Motion repeatedly refers to 13FH as if it remains a counterparty to the
Development Agreement and Temporary Management Agreement. It is not. There is
nothing in this Court's ruling to suggest that 13FH has any duties to the bankruptcy estate
under the Development Agreement or integrated Temporary Management Agreement.
This is because the Miami-Dade court ruled conclusively, in an order binding on the debtor
and Condo 1, that 13FH has no such duties.
Condo 1 states that the Court's order allows Lennar to treat the entirety of the
Development Agreement and Temporary Management Agreement as enforceable, as
though this is something remarkable. As with any order authorizing assumption of
executory contracts, the order under appeal empowers both the bankruptcy estate and
Lennar to enforce the agreements as they are written. That is the purpose and goal of
assumption of executory contracts under section 365. There is no doubt that the
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Development Agreement and Temporary Management Agreement are executory contracts,
as the Court ruled in a prior final order. Once assumed, it does not matter whether the
obligations in the assumed contracts would run with the land or not; the agreements are
then binding on and benefit all parties, according to their complete terms.
Condo 1 points to its litigation against Lennar in Palm Beach County as an ongoing
suit where its challenges to the Development Agreement remain in play. Condo 1 describes
that suit as "a new action . . . asserting those breach-of-contract claims the Miami-Dade
County court had noted were viable" under the Development Agreement. Condo 1 thus
argues that the complaint in the Palm Beach County action is simply a substitute for the
amended complaint authorized by the Miami-Dade court. This is not the case. As the Palm
Beach County court recognized, the "new" complaint in Palm Beach County is just a
regurgitation of allegations and claims rejected by the Miami-Dade court, which is why the
Palm Beach County court transferred the second suit to Miami-Dade County. In any case,
Condo 1 suggests that their state court litigation should be permitted to proceed to
conclusion before the agreements are assumed here. As noted above, binding case law does
not require that.
Similarly, Condo 1 argues that before approving assumption of the agreements, this
Court should have independently weighed each component of the Development Agreement
to determine whether it is a provision that would run with the land under Florida law.
There are two reasons why such a review was not required or appropriate. First, as
elaborated above, in reviewing a trustee's motion to assume or reject an executory contract
this Court does not address contract disputes. The assumption and rejection of executory
contracts is a summary process in which the Court's ruling is limited to determining
whether the trustee exercised reasonable business judgment in his decision, not whether
each and every claim relating to the affected contracts may be determined in the debtor's
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favor. 12 Here, the trustee was well within his discretion to assume the agreements.
Second, the Miami-Dade court already ruled in a binding way that Lennar is the successor
to 13FH under the agreements.
In light of (a) the trustee's thorough review of the circumstances of this case relevant
to his decision to assume the agreements, (b) the deference to be accorded by this Court to
the trustee's business judgment in determining that the bankruptcy estate should assume
the agreements, (c) the orders of the Miami-Dade court which are preclusive with regard to
Lennar's rights under the agreements, (d) the obvious benefit to the estate obtained by
assumption of the agreements, and (e) the equally obvious detriment to the estate if the
agreements were rejected, Condo 1 has no chance of success in its appeal from the order
authorizing assumption of the Development Agreement and integrated Temporary
Management Agreement.
Condo 1 Will Not Suffer Irreparable Injury Absent a Stay
Condo 1 argues that absent a stay the trustee "has indicated an intention or
consideration of imposing assessments, encumbering estate assets, paying attorneys' fees,
paying temporary management fees, establishing governance consequences, and
administering litigation based on the premise that Lennar stands in 13FH's shoes and that
13FH may abandon rights through transfer." None of these supposed impacts constitute
irreparable injury. Among other things, the alleged harm is either too speculative to
12 Amazingly, Condo 1 cites relevant precedent on this point but somehow concludes that, because this
Court should not adjudicate disputed contract issues in the context of a motion to assume a contract,
the Court should deny the motion to assume until all such disputes are litigated to conclusion. See
Dkt. No. 239 (pages 13-14). This is exactly the opposite of what the case law provides. The very case
cited by Condo 1 stands for the proposition that the Court's review is limited to "a judgment of the sort
a businessman would make" which "could turn out to be wrong" but would be "simply an error of
business judgment, not a legal error." Orion Pictures Corp. 4 F.3d at 1099.
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constitute irreparable injury or involves the potential payment of money which can be
recovered.
The trustee has stated during hearings, and apparently when meeting with
homeowners, that there is a possibility of assessment of homeowners as a result of the
debtor's bankruptcy case. The trustee has not stated that such assessments would flow
specifically from the assumption of the Development Agreement and integrated Temporary
Management Agreement. There is no reason to believe the order under appeal will result
in assessments. Indeed, as the Court stated during its ruling, it is very likely that the
litigation resulting from an attempted rejection of the agreements would result in much
greater expense and thus be more likely to result in assessments.
While the trustee has stated that a chapter 11 plan in this case may involve the
debtor encumbering its assets to obtain necessary capital, there is no plan on file at this
time. Condo 1 and other parties in interest will have ample opportunity to be heard on any
proposed plan. It is already clear that the debtor does not have sufficient revenue to pay its
ongoing expenses as well as outstanding claims. This would be even more true if the
trustee were to reject the Development Agreement and Temporary Management Agreement
and embroil the estate in further expensive and likely doomed litigation. In any case, this
alleged harm does not flow from the order under appeal.
The order authorizing assumption makes clear that the debtor's remaining
monetary cure obligations, which include payment of attorneys' fees under the
Development Agreement, are subject to further negotiation between the trustee and
Lennar. This will be addressed in a chapter 11 plan or by motion and therefore will be
subject to creditor review and opportunity to object. There is no imminent risk that the
trustee will pay Lennar's legal fees. In any case, the estate could recover the payment and
so it is not irreparable.
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Lennar operates the primary recreation facilities consisting of the new clubhouse
and pool complex on Lennar's own property. Residents of Condo 1 and Condo 2 use these
facilities daily. By assuming the Temporary Management Agreement, the estate confirmed
its obligation to make monthly payments to Lennar for its services (reserving past due
amounts for further negotiation). If the trustee had not assumed the Temporary
Management Agreement, the estate would still be liable to Lennar under 11 U.S.C. § 503.
Based on presentations earlier in this case, it appears likely that the monthly fee under the
Temporary Management Agreement is lower than the actual value conferred by Lennar
and so Lennar's administrative expense claim likely would be higher than the contractual
fee. In any case, the payment of contractual fees to Lennar is not irreparable injury as such
fees are recoverable.
Condo 1 does not explain what it means by the phrase "establishing governance
consequences." Perhaps Condo 1 refers to the debtor's management change to occur when
the Delray Trails project is substantially sold. Under the Development Agreement, at the
time of turnover of the Delray Trails association by Lennar to homeowners in that
subdivision, the debtor will be managed by equal numbers of representatives selected by
Condo 1, Condo 2, and Delray Trails. But the trustee has completely supplanted the
debtor's board until a plan is confirmed in this case. All parties in interest will have an
opportunity to weigh in on any plan. There is no imminent risk that the debtor's
management structure will change.
Condo 1 argues that the trustee will be "administering litigation" based on the
assumption of the agreements. Condo 1 argues that absent a stay the trustee may take
"litigation positions belonging to or materially affecting Condo No. 1 and its residents."
Condo 1 provides no hint as to what this means. The trustee is the sole person with
authority to take any action in the name of the debtor. This includes pursuing claims held
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by the estate and defending claims against the estate. These rights and duties persist
whether or not the trustee assumed the agreements. Based on recent argument during
hearings, the Court suspects that this concern centers on the trustee's stated intention to
investigate claims of the estate against the debtor's former board members, including the
primary client contact for Condo 1 who was previously the primary client contact for the
debtor. While it is possible some of such claims may relate to the debtor's actions in
connection with Lennar, it is unlikely such claims will be affected by the assumption or
rejection of the Development Agreement and Temporary Management Agreement.
None of the foregoing constitute irreparable injury within the meaning of
Bankruptcy Rule 8007.
The Bankruptcy Estate, Residents, and Lennar Will Suffer if a Stay is Imposed
Condo 1 argues that granting a stay pending appeal will not harm Lennar as "it has
not loaned money to the Debtor, advanced estate financing, or extended credit in reliance
on estate assets" as though these are the only reasons a stay may be required. If a stay is
entered, the bankruptcy estate will suffer as there will be further delay in completion and
turnover of the recreation complex for the benefit of all residents. Condo 1 ignores the fact
that Lennar is daily devoting its resources to operating the substantial clubhouse and pool
facilities for the benefit of the debtor's residents. Lennar has a right to be paid its ongoing
fees under the Temporary Management Agreement for those services. If those fees are not
paid, Lennar may prohibit residents in Condo 1 and Condo 2 from access to the new
clubhouse and pools.
The Public Interest Supports Permitting the Trustee and Lennar to Proceed
The Bankruptcy Code and applicable case law provide that the trustee has
discretion to determine whether to assume or reject executory contracts based on his
reasonable business judgment, subject only to court review to ensure his discretion was
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applied properly. Condo 1 asks this Court and the District Court to stand this summary
process on its head, and in the meantime put a halt to the construction project at the center
of administration of this chapter 11 case. The public interest does not support perverting
that summary process so that Condo 1 may tilt at windmills in hopes of extorting a better
deal from Lennar. The public interest supports permitting the trustee and Lennar to
complete construction of the debtor's new recreation complex without further interference
or delay.
The Court Need Not Address the Question of a Bond
Because Condo 1 is not entitled to a stay pending appeal, it is not necessary for the
Court to determine whether a bond is required or the amount of a bond. However, the
Court notes that if a stay were appropriate in this case, the required bond would be
substantial as Lennar is due monthly fees for management of the existing recreation
complex for the debtor's residents and the debtor and its residents will suffer damages as a
result of cessation of construction on the long-awaited recreation complex. Lennar's
suggestion that the bond would need to be at least $480,000, plus additional amounts
representing damages to the estate for at least a six-month period, is reasonable under the
circumstances of this case.
Bankruptcy Rule 6006(d) Does Not Apply
Condo 1 also cites Bankruptcy Rule 6006(d). That rule provides for an automatic
stay for 14 days of any order authorizing the assignment by the bankruptcy estate of a
contract under 11 U.S.C. § 365(f). The trustee did not seek an assignment to Lennar of the
Development Agreement and integrated Temporary Management Agreement because
Lennar was already the counterparty to those agreements. Bankruptcy Rule 6006(d) does
not apply here. Even if it did, the short-term stay under that rule would have expired on
May 27, 2026.
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Order
For the foregoing reasons, the Court ORDERS and ADJUDGES as follows:
1. 	The Motion for Stay Pending Appeal or Alternatively Under Bankruptcy Rule
6006(d) Regarding Order Assuming Contracts and Allowing Fees [Dkt. No. 239] is
DENIED.
2. 	The hearing scheduled for June 22, 2026 to consider the Motion for Stay
Pending Appeal or Alternatively Under Bankruptcy Rule 6006(d) Regarding Order
Assuming Contracts and Allowing Fees [Dkt. No. 239] is CANCELED.
3. 	The Clerk is directed to forward a copy of this order to the District Court to
be docketed in the appeal resulting from the notice of appeal filed at docket number 234.
###
Copy to:
Terry A. C. Gray, Esq.
Terry A. C. Gray, Esq. must serve a copy of this order on all appropriate parties and file a
certificate of service with the Clerk.
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