A national lender has asked an Orange County judge this month to grant foreclosure for 82 acres in Orlando's tourism corridor owned by developer Stan Thomas, filing a motion for summary judgment that contends Thomas has made no viable defense.
But this can be simply a leverage move while both sides are still actively negotiating for Thomas to bring in a new lender or equity partner, which would resolve property foreclosures the Georgia-based developer faces in Orlando, Texas and Tennessee.
Ardent filed its original foreclosure request in Orange County Circuit Court on Oct. 18 for land near the Orange County Convention Center's north/south concourse, and between International Drive and John Young Parkway.
The lawsuit stems from a July 2015 original mortgage of $27 million that Thomas affiliates OHL Holdings and Universal City Property Management III (UCPM III) took out for 82 upland acres that lie within about 260.5 gross acres, across eight land parcels.
Ardent's attorneys now contend that Thomas' affiliates made no affirmative defenses of factual substance when they responded on Jan. 9. They denied the allegations vaguely, but offered no evidence to stand in the way of a summary judgment.
"What you will likely see next is this either goes forward to a (summary judgment) hearing in a few months, or the (Thomas affiliates) ask to amend their pleadings to add additional defenses, and then it would drag out," Christy Irwin Parrish, local commercial attorney with experience in foreclosures, told GrowthSpotter on Friday.
In cases where the two sides are still negotiating for new terms to a loan, a lender's motion for summary judgment helps them keep that borrower "on the clock," Parrish said.
"At any moment they feel like the borrower is no longer negotiating in good faith, they can drop the hammer and ask for a hearing," she added.
Attorneys for Thomas and Ardent Financial did not respond to requests for comment on Friday.
The summary judgment calls for foreclosure against four land owner affiliates of Stan Thomas, and monetary damages against two and a Thomas Family Trust for the full amount of debt owed.
Thomas' side has not responded to the latest motion, and no hearing date has been set.
If a summary judgment is eventually granted, the court would normally set a sale date on the 82 acres for 20 to 35 days out. But it's not uncommon for a lender to ask for an extended sale date if they're still trying to negotiate terms with the borrower, Parrish said.
Public foreclosure sales in Orange County are typically conducted online. Anyone can bid, but the plaintiff (AFF Universal) can credit-bid up to the judgment amount, while all other bidders must pay cash.
In this case, if the lender was the winning bidder it would take title of the property and the value would be credited against the judgment amount. It could also be entitled to a deficiency judgment if less than the $32.52 million was recovered.
There are some strategic decisions that must be made by a plaintiff with a foreclosure judgment regarding how high to bid, said Eric Golden, partner with Burr & Forman law firm in Orlando.
"Not all plaintiffs will bid the full judgment amount," he said. "The property involved and the anticipated interest in it from third parties will likely play a large role in this decision."
The undeveloped land in question hold prime positions in the tourist corridor along International Drive and Destination Parkway, and lie near or in between Universal Orlando's land assets.
Various affiliates of Thomas still own more than 862 acres in the tourist corridor, many with different debt and equity partners involved.
In a separate lawsuit in Orange County, Thomas' UCPM III is asking a judge to place an injunction on Universal's land owner, SLRC Holdings, to block it from theme park development.
A hearing was held Friday for that case to resolve multiple motions made by each side, which included four confidential documents having been released in the court record, and Thomas' attorneys dumping an inordinate 40,000-plus documents on SLRC's attorneys, most of which weren't relevant to keyword requests.
UCPM III and SLRC have each previously filed their own motions for summary judgment in this case, which will be reviewed at the next hearing on April 10.