UPDATE! As of 10 a.m. Sept. 1, Parliament House has officially been put in the control of a receiver. That’s according to Russ Gaines, president of Southwest Guaranty Ltd., the commercial lending company to filed the foreclosure lawsuit against the Parliament House and made the request to a judge for the receivership.
“[P-House owner] Don Granatstein has done a very good job in reviving [Parliament House’s] image and we have no intent on not working with Don Granatstein, however, our receiver is currently running the Parliament House,” Gaines said.
Gaines said the Parliament House is “very much open” and regulars won’t even notice a difference.
“There shouldn’t be any noticable change at all in way Parliament House is run, and that’s both the short term and long term plan,” he said. “As the lender, we need to make sure that the business is being properly run and we want to make sure there are adequate controls in place for the business.”
When asked for specifics about those controls, Gaines would not comment. He did confirm that there were “serious breaches” in his company’s loan documents with P-House but would not specify what those breaches are.
“[The foreclosure lawsuit] is a lengthy process, so in the meantime, we need to start gain control of the cash flow and that’s what the receivership is about,” Gaines said.
Watermark’s 17.18 issue went to press on Aug. 31, with this original story appearing in print:
Despite extensive courtroom wrangling and a foreclosure lawsuit over an unpaid debt, all parties involved steadfastly agree on one key thing: It’s business as usual at the Parliament House.
Southwest Guaranty, Ltd. is still fighting P-House in court over a $7.9 million debt.
In a Watermark story released Aug. 19, Parliament House owner Don Granatstein insisted that a receivership hearing set for Aug. 25 would “never happen.”
However, it did happen, and the court ruled in favor of Southwest Guaranty Ltd.’s request for intervention.
“A very crazy ruling came down and they got a receiver appointed,” said Granatstein. “I said ‘no way’ for lots of reasons because every lawyer told me a judge would never do this.”
In a receivership, a company’s operations and assets are placed in the control of a receiver under court orders.
Jeff Deery is a senior partner at Orlando law firm Winderweedle, Haines, Ward & Woodman, the firm representing Southwest.
“The receiver is a group called Focus Management Group and they deal with receiverships and properties nationwide,” he said. “Ownership has not changed because a receiver is appointed; just the day to day management structure is different.”
Granatstein is concerned about the possibility of new management.
“I have 250 employees working here and [a receiver] would shatter the place and I’m not going to let them do it,” Granatstein said. “They have no idea how to run this place.”
He said he has a powerful bargaining chip: his liquor license.
“The bottom line is that I own the liquor, that’s declared in the judge’s order and so they better negotiate with me hard,” he said. “If they’re going to put someone in here, they better put someone in with my blessing or else they don’t sell liquor at the Parliament House.”
Details about the receivership, such as Granatstein’s role and when the receiver would actually start work, are still unclear. Both sides report that they are waiting to hear from the receiver and the court about what comes next.
“The lawsuit will proceed along its usual course, but in the meantime, Parliament House will continue to be operated as it always has,” said Deery.
A receivership lasts until it’s dissolved by the court, typically at the end of the lawsuit. Deery said despite the foreclosure lawsuit, there may not be an actual foreclosure.
“Whether or not it is foreclosed out is something that will be determined in the context of the litigation itself,” Deery said.
He added that foreclosure does not mean the end of Parliament House.
“There are many things that can happen to a property in foreclosure,” Deery said. “Shutting it down is one of them, but it’s certainly not the end goal in this particular case.”
Granatstein said he tried to fend off the lawsuit.
“The loan came due and [Southwest] wanted it paid off with interest and penalties,” he said. “We couldn’t refinance so we tried to make a deal with them which they turned down, and that’s what started the whole thing. It’s tough to get refinancing. We thought we did a great job, but they wouldn’t accept it.”
Still, he’s not giving up on his business.
“All I can tell you is, it’ll have a happy ending,” said Granatstein.
