A bankrupt LLC owned by Centro Miami developer Harvey Hernandez has reached a deal to sell nine of the building’s condos for $3.2 million after a judge approved its Chapter 11 reorganization plan.
Centro NGD Holdings entered into the sales agreement with an entity managed by downtown Miami real estate investor Meir Shai Ben-Ami. The deal is expected to close by the end of the month, according to a reorganization plan obtained by The Real Deal. On Tuesday, bankruptcy judge Robert Mark approved the plan, court records show.
Hernandez’s Newgard Development Group completed Centro Miami, a 37-story, 352-unit condo tower at 151 Southeast First Street in Downtown Miami, in 2016. Centro NGD, a separate Hernandez entity, bought nine of the units as investment properties to rent out.
Proceeds from the sale will be used to pay off Centro NGD’s creditors, including $2.7 million to PS Funding, a lender that sued Centro NGD in 2020 over an alleged default. The nine condos were scheduled to be sold at a foreclosure auction in early February, a month after PS Funding won a $3.1 million judgment against Centro NGD, court records show.
Centro NGD filed for bankruptcy protection to stave off the foreclosure sale and find a buyer for the units, the firm’s Chapter 11 petition states.
Reached by phone, Hernandez declined to comment. Catherine Kretzschmar, an attorney representing Centro NGD in bankruptcy court, did not respond to a request for comment.
Other creditors that will get paid from the bulk condo sale include the Centro Downtown Condominium Association, which will receive $76,900; the Miami-Dade Tax Collector, which will receive $87,000; and the Small Business Administration, which will receive $7,600. Another $122,500 will pay off tax liens on the condos, the reorganization plan states.
In recent years, Hernandez and another of his entities, NGD Homesharing, have spent a fair amount in Miami-Dade Circuit Court litigating with Airbnb as well as former business partners and ex-employees over disputes tied to the developer’s short-term rental business.
NGD Homesharing and Airbnb settled dueling lawsuits over a derailed partnership in 2020.
Last month, NGD Homesharing dropped a two-year-old civil lawsuit it had brought against competitor RealPage, Mirasol Capital and three former employees who had jumped to RealPage: Todd Butler, Collin Ross and Kayla Neller. NGD Homesharing alleged RealPage, Mirasol and the trio had misappropriated trade secrets.
In a June 13 statement, RealPage accused NGD Homesharing of violating court orders and creating other delays in the case to avoid turning over documents for discovery, and said NGD dropped the suit “on the eve of a contempt hearing where NGD was facing potential dismissal of its claims.”
NGD Homesharing suffered another defeat in January, when a Miami-Dade judge ordered the firm to pay minority partner Cindy Diffenderfer a $963,000 judgment. NGD Homesharing had failed to pay Diffenderfer more than half of a $1.05 million settlement from a wrongful termination suit she filed against the company in 2019, the ruling states.