A $1,250 legal bill from a spinoff case involving the idled Bama Bayou resort in Orange Beach is no longer holding up a settlement worth $20 million to $50 million. Mobile County Circuit Court Judge Sarah Stewart is expected to rule on the case soon.
“She said these were the last things she had to deal with before a final judgment,” Sam McKerall, one of the lawyers representing Bama Bayou investors, said.
About a dozen lawyers and others gathered on Aug. 16 for Stewart to rule on how much lawyers handling a conflict-of-interest motion in the case should be paid. A law firm from Orlando was hired by Southeast Property Holdings (SEPH) to file the motion in 2017, saying there was evidence of a conflict of interest involving Stewart herself.
“The Orlando lawyers were brought into the case specifically to try and convince her she had a conflict of interest,” McKerall said. “There were issues that do not involve the guarantors at all. They involve peripheral issues, side issues. It’s a fight that really doesn’t have anything to do with us.”
It was just the latest stumbling block in a famously delayed lawsuit that has been dragging on since 2008 through an initial foreclosure, sale and side lawsuits that McKerall says will soon come to a head.
“We are exactly where we were a year ago in August, when these people from Orlando started this about a conflict of interest,” McKerall said. “I think it’s unfortunate they’ve been able to delay the case for an entire year over something they didn’t succeed at. She has ruled that she had no conflict of interest.”
McKerall said the next and hopefully final step will be a ruling from Stewart on how much Bama Bayou investors and Marine Park owe SEPH.
“I think the ruling will come out soon,” McKerall said. “I think it will say whether or not the guarantors owe anything. It will also say precisely what Bama Bayou and its subsidiary, Marine Park, owe.”
His contention, along with the other lawyers and defendants on Bama Bayou’s side, is that amount is around $20 million. SEPH contends the amount is closer to $50 million because they want the Bama Bayou investors to pay back what’s owed in the foreclosure and its attorney fees.
SEPH is the survivor of Visions Bank, the original mortgage holder.
Waiting in the wings is a Texas company, Presidium, which has expressed an interest in the site and has been examining the site. Presidium is also working on a tax incentive agreement with the city of Orange Beach should it somehow be able to buy it. But it can’t be sold until Stewart rules.
Across the Intracoastal Waterway from The Wharf, the vacant Bama Bayou buildings — including condos, an amphitheater, water features and conference rooms — was under construction in 2009 when the developers defaulted on a $21 million loan. It has been abandoned ever since.
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