A federal bankruptcy judge ruled against Wellington developer Glenn Straub’s no-cash bid to buy the unfinished Palm House Hotel.
Straub was trying to submit a “credit bid,” which would allow him to make an offer without putting down any cash for the Palm Beach condo-hotel project at 160 Royal Palm Way, according to the Palm Beach Daily News.
The bid fell through after the judge raised questions about Straub’s claims he was owed money as a creditor of the project. Straub claimed he held the rights to a defaulted $27.5 million mortgage after he alleged his companies loaned about $40 million to the failed EB-5 project, according to the Palm Beach Daily News.
Evidence, however, showed that Straub never lent any cash to the deal, the publication reported.
Straub plans to appeal the credit-bid ruling, his Miami attorney Luis Salazar told the Daily News.
Straub still has a chance to re-bid on the property when it heads to auction on March 8. But the bid will have to exceed $32 million, which is what Related Companies offered as a stalking horse bid late last year.
Federal officials have charged the former developer, Robert Matthews, with multiple counts of wire and bank fraud and money laundering over the development. The project solicited money from the federal EB-5 program, which gives foreign investors a visa in exchange for an investment in American enterprises. [Palm Beach Daily News] — Keith Larsen