Facing the threat of a foreclosure auction, Harvey Hernandez’s condo company filed for bankruptcy protection to save nine units at Centro Miami, a downtown Miami tower the developer built.
Last month, Centro NGD Holdings filed for Chapter 11 bankruptcy in federal bankruptcy court in Miami, two days before the auction of the nine units scheduled for February 8. In January, lender PS Funding won a $3.1 million judgment in Miami-Dade Circuit Court against Centro NGD, two years after it sued Hernandez’s company for allegedly defaulting on a $2 mortgage. millions of dollars. The bankruptcy filing suspended the sale.
Hernandez did not respond to a phone message and email seeking comment. Catherine Kretzschmar, an attorney representing Centro NGD in bankruptcy court, declined to comment.
Hernandez’s other company, Newgard Development Group, has developed Centro Miami, a 37-story, 352-unit condominium at 151 Southeast First Street. The building does not have adjoining parking. Centro NGD purchased the nine units as investment properties available for rental.
According to Centro NGD’s bankruptcy filings, four of the nine condominium units are currently rented and generate a combined rent of $9,725 per month. The nine units are paying a combined $6,373 per month in combined condo association fees, according to filings.
Centro NGD filed for Chapter 11 to “maximize the value of Centro units through a structured sale process negotiated with Centro’s secured and unsecured creditors,” a case summary reads. “Centro also seeks to explore increasing the rental value of Centro units in the context of maximizing recovery for all creditors.”
According to the bankruptcy petition, PS Funding is Centro NGD’s largest creditor. The company’s other debts include $142,393 to Newgard Development Group, $110,000 to Hernandez personally, $165,600 in property taxes and $74,874 to the Centro Downtown Condominium Association, according to bankruptcy filings.
Miami-based Hernandez and his companies have faced several legal battles in recent years, including lawsuits involving home-sharing platform Airbnb. In January, a Miami-Dade judge ordered his company NGD Homesharing to pay its minority partner Cindy Diffenderfer a $963,000 judgment. According to the ruling, NGD Homesharing failed to pay her more than half of a $1.05 million settlement stemming from a lawsuit she filed against the company.
Hernandez’s legal troubles didn’t stop him from launching new projects. In September, a subsidiary of Newgard paid $50.5 million for a waterfront site near Miami’s downtown Brickell, where Hernandez plans to build a three-tower residential and marina project.