Two Firms Face Allegations of Wrongdoing in Bankruptcy of Property Owners' Group

MIAMI—Two South Florida law firms face allegations of wrongdoing in adversary proceedings filed in a bankruptcy case for a property owners' association. That is according to a recent article written by GlobeSt.com sister publication, ALM's Daily Business Review.

The article says that Boca Raton-based Jay Steven Levine P.A. and Kaye Bender Rembaum in Pompano Beach once represented Spanish Isles Property Owners Association Inc. in Saddlebrook, just west of Boca Raton.

But Chapter 11 Trustee Margaret J. Smith claimed the firms allowed the association's governing documents to lapse, leaving it with no valid declaration and bylaws to direct its operations, enforce its rights or levy liens for unpaid homeowner dues, the article says. Her complaints claim “constructively fraudulent transfers of estate property and … professional negligence” against both firms, which allegedly overlooked the association's governing documents until after it was too late, and the group had already filed for bankruptcy.

“Levine received certain transfers from the association during the two-year period prior to the petition date, without giving reasonable equivalent value,” according to Smith. “Levine sought to enforce lapsed covenants, collect fees and litigate against homeowners who were not bound by the association's governing documents, and in the process received thousands of dollars in payments from the Association for this work in breach of its professional duties.”

The articles says that the association's documents date back to its incorporation in 1979 and needed to be renewed or preserved in 2009 under Florida law. Without valid documents, the nonprofit lacked legal authority to collect homeowner fees or govern itself under its bylaws. But it continued to assess about $350 per home for annual revenue of about $100,000, according to Smith.

Click here to continue to read the full article on ALM's Daily Business Review.

MIAMI—Two South Florida law firms face allegations of wrongdoing in adversary proceedings filed in a bankruptcy case for a property owners' association. That is according to a recent article written by GlobeSt.com sister publication, ALM's Daily Business Review.

The article says that Boca Raton-based Jay Steven Levine P.A. and Kaye Bender Rembaum in Pompano Beach once represented Spanish Isles Property Owners Association Inc. in Saddlebrook, just west of Boca Raton.

But Chapter 11 Trustee Margaret J. Smith claimed the firms allowed the association's governing documents to lapse, leaving it with no valid declaration and bylaws to direct its operations, enforce its rights or levy liens for unpaid homeowner dues, the article says. Her complaints claim “constructively fraudulent transfers of estate property and … professional negligence” against both firms, which allegedly overlooked the association's governing documents until after it was too late, and the group had already filed for bankruptcy.

“Levine received certain transfers from the association during the two-year period prior to the petition date, without giving reasonable equivalent value,” according to Smith. “Levine sought to enforce lapsed covenants, collect fees and litigate against homeowners who were not bound by the association's governing documents, and in the process received thousands of dollars in payments from the Association for this work in breach of its professional duties.”

The articles says that the association's documents date back to its incorporation in 1979 and needed to be renewed or preserved in 2009 under Florida law. Without valid documents, the nonprofit lacked legal authority to collect homeowner fees or govern itself under its bylaws. But it continued to assess about $350 per home for annual revenue of about $100,000, according to Smith.

Click here to continue to read the full article on ALM's Daily Business Review.