The latest courtroom battle for Channelside Bay Plaza kicked off Tuesday in a federal bankruptcy court in Delaware. The core issue this time around is Tampa Bay Lighting owner Jeff Vinik's winning bid of $7.1 million for the failing downtown Tampa mall.
The results of the July 2 auction need the approval of U.S. Bankruptcy Judge Christopher Sontchi. But the outcome is being challenged by a group of local real estate investors, Liberty Channelside LLC, who have spent the past year fighting in court for control of the complex.
The Irish bank liquidators trying to sell the property want the judge to uphold Vinik's winning bid. They rested their case Tuesday. Liberty will start its case on Thursday.
Lawyers spent the day questioning one of the Channelside auctioneers: DJM Real Estate general counsel Ed Zimmer.
Liberty has alleged that the auction's main players — the bank liquidators, the Tampa Port Authority and the Vinik ownership group — colluded to ensure that Vinik won. Liberty pointed out that 77 entities expressed interest in bidding but only three showed up at the auction: Vinik, the port and Liberty.
And though the Tampa Port Authority was a competing bidder, it endorsed Vinik's plans for Channelside days before the auction.
"Did the port express any disappointment that they had lost the auction?" asked Liberty's attorney, John Anthony.
"No," Zimmer said.
"Did they express joy and happiness that Vinik had won the auction?" Anthony asked.
"I think this was a professional business meeting," Zimmer said.
But Zimmer also said this: "Had Liberty bid, it would have driven up the bidding."
That's because Liberty failed to bid on July 2. Van Durrer II, the attorney representing the liquidators, emphasized that Liberty could have tried to outbid Vinik in the auction.
"Was Liberty offered multiple opportunities to bid?" Durrer asked.
"Yes," Zimmer said
The witness also assessed Vinik's ownership group, CBP Development LLC, which won the auction with a $7.1 million bid and a $10 million letter of credit to fund a Channelside makeover.
"They followed all the steps," Zimmer said. "They very closely followed the bid procedures."
After Vinik won the auction, Liberty filed court documents offering to pay $10 million for Channelside. Anthony asked Zimmer if his real estate firm, which will be paid based on how much it gets for Channelside, would like to make as much money as possible from the sale.
"If you're asking me if I'd be happier with a higher commission," Zimmer said, "the answer is yes."
Contact Jamal Thalji at [email protected] or (813) 226-3404. Follow @jthalji.