DMD Ventures launched a preemptive legal strike in an attempt to stave off foreclosure of a 2-acre multifamily development site in Fort Lauderdale.
On June 13, a Naples-based lending entity managed by lawyer Anthony Korda sued Fort Lauderdale-based DMD in Broward County Circuit Court for allegedly defaulting on an $11 million mortgage.
But a month earlier, an affiliate of Fort Lauderdale-based DMD, led by co-CEOs Fred Burgess and Jack Flechner, sued the Naples entity in Collier County Circuit Court, alleging it has no legal basis for finding DMD in default, or for seeking foreclosure of its property at 6210 North Andrews Avenue. The lender is also seeking to seize two Twin Peaks restaurants DMD developed in Fort Myers and Fort Lauderdale.
The Naples lending entity was established by Korda to distribute funds from 24 Chinese investors participating in the EB-5 visa program, which provides permanent U.S. residency to foreigners and their immediate family members who invest in development projects that create jobs, court records show.
“We believe the [foreclosure] complaint is baseless in that the borrower has paid all amounts due under the loan and is not in default,” Flechner told The Real Deal in an email. “We intend to vigorously litigate.”
Korda and the Naples-based lending entity’s attorney declined comment.
While the mortgage is tied to the development of the Twin Peaks restaurants in Fort Myers and Fort Lauderdale, the Naples entity alleges that a security agreement allows it to place liens on any DMD assets, including real estate not associated with the restaurants, the foreclosure complaint states.
The vacant parcel on North Andrews Avenue is approved for a seven-story building with 200 apartments and 5,000 square feet of retail. In 2017, DMD acquired the property, but deed records don’t list the purchase price.
DMD’s relationship with the Naples entity predates the acquisition of the multifamily development site. In 2014, the Naples entity lent DMD affiliates $9.5 million to finance the construction of the two restaurants. In 2016, the loan amount was increased to $12 million, but then lowered to $11 million in 2021, the foreclosure complaint states.
