Welcome to the Blog
Final Night Entertainment
The Fontainebleau Hotel
About South Beach
Miami Spice Posts
2014 Conference Revisited
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Welcome to the Blog
Final Night Entertainment
The Fontainebleau Hotel
About South Beach
Miami Spice Posts
2014 Conference Revisited
Welcome to the NCBJ Annual Conference Blog for our 89th Annual Meeting at the Fontainebleau in Miami Beach. Contributors to this Blog will write about a wide range of topics that we think you’ll find interesting and informative, all relevant to our meeting that is scheduled to begin on September 28, 2015. When you come back, you’ll soon the reading about–
We welcome all bankruptcy professionals to submit posts for this Blog (you can find a link to the guidelines for posting on the Blog home page).
As you know, the NCBJ’s Annual Meeting is the premiere education and networking conference on bankruptcy insolvency. Last year, over 200 present and former bankruptcy judges attended, along with over 1,500 attorneys, accountants, and other insolvency professionals. Miami Beach is a vibrant seaside retreat. We have planned educational activities featuring some of the leading speakers in the country and we’ll host a varied menu of programs sponsored by our colleagues at the ABA, the American College of Bankruptcy, ABI, AIRA, CLLA, IWIRC, and TMA. But—as you’ll be hearing about in other posts—we’ve got some special non-education treats in store.
Speaking of Final Night, I‘m delighted to announce that renowned funk and soul band, Tower of Power, fit us into their 2015 tour to play our final Night Dinner. Purveyors of Urban Soul since 1968, these guys will be all over the country this spring and summer and can really bring it. I just saw them a year ago and I can testify to that.
If you’re tired of chicken and peas sit-down dinners punctuated by speeches, fear not; we’ve revamped all of that, too. This year’s Final Night festivities will include lots of tastes of Miami, several bars, and lots of seating combinations so you can network with new friends and old. And, there’ll be plenty of room to dance, because when Emilio, Doc and Tower of Power’s wind section get going, you’ll want to be up there!
So please check back periodically for new postings to the Blog. Many thanks to the talented judges who moderate. I look forward to seeing you in Miami.
Hon. Bob Nugent, President, NCBJ
The American College of Bankruptcy (ACB) is holding its annual Fall Luncheon for Fellows on Sunday, September 27th at the Fontainebleau Hotel. The lunch will feature “Chapter 11 by the Numbers – Do They Still Add Up?” a presentation by ACB Fellows financial experts led by Melissa Kibler Knoll of Mesirow Financial, Chicago, IL. We are also pleased to announce that one of our local American College of Bankruptcy Foundation (ACBF) pro bono grant recipients, Dade Legal Aid/Put Something Back, will be sharing during the lunch.
Put Something Back is at the forefront of assisting low-income bankruptcy clients in South Florida, thanks to a series of generous grants received from the ABCF.
Nearly 20 years ago, PSB applied for and received its first grant from the ACBF. This seed money was used to launch the Bankruptcy Project at PSB which emerged and flourished into the pro bono clearinghouse it is today. Funds have supported a strategic mix of pro bono partnerships, law firm and law school projects, innovative recruitment seminars, outreach clinics and workshops.
ACBF funds helped to recruit, train and mentor thousands of new and seasoned attorneys to handle countless chapter 7 and 13 pro bono cases for disadvantaged clients such as elderly residents, retirees, victims of domestic violence, foster teens, families, first responders and veterans facing loss of homes, extreme economic hardship and extraordinary medical debt. ACBF funds also help to serve those in need via expanded clinics, a legal hotline, a website with updated self-help materials and on-line marketing to recruit lawyers to handle cases.
With ACBF funding, Put Something Back has been able to accomplish this and so much more. We thank you for the opportunity to serve those in need with nowhere else to turn for legal assistance.
Come join us at the 22nd Annual IWIRC Fall International Conference at the Eden Roc Miami Beach Hotel in Miami, FL on September 26th and 27th. The IWIRC International Fall Conference boasts two very timely panel discussions on two hot areas in the insolvency and restructuring industry – energy and municipal bankruptcies.
Our first session, “Keeping the Lights On – Challenges Facing the Energy Industry”, promises a lively discussion from industry experts Adrienne Clair (Stinson Leonard Street), Stacey Dore (Energy Future Holdings), Linda Myers (Kirkland & Ellis LLP), Mary Edmonds (The Williams Companies Inc.) and Katherine Piper (Calpine Corporation) on the ever-rocky energy industry. From changing regulatory issues to clean air plans to oil and gas explorations and numerous recent bankruptcy filings, the panelists will dive into the current state of the energy industry and the many hurdles companies are facing in today’s climate in their attempts to keep the lights on.
Our second panel, “From Detroit to Puerto Rico: Chapter 9’s Role in Changing Government” features moderator Summer Chandler of McCalla Raymer LLC and panelists Hon. Steven Rhodes of US Bankruptcy Court (Ret), Sonia Colon of Ferraiuoli LLC, Martha Kopacz of Phoenix Management and Andy Dillon of Conway McKenzie. With Puerto Rico’s current default on its debt payments, what are the next steps? The panel will dive into chapter 9 and the current state of affairs in Puerto Rico.
The panel discussions begin on Sunday, September 27th at 9am following two networking breakfast opportunities, including a round table discussion with representatives from the America College of Bankruptcy. This will be a conference you do not want to miss!
For more information or to register for the IWIRC Fall Conference click here or visit our website at www.iwirc.com. We look forward to seeing you next month in South Beach!
Join AIRA on Tuesday, September 29th for an educational breakfast program entitled “What’s New in Mass Tort Cases?” The panel will review two recent cases – New England Compounding Pharmacy (“NECP”) and Montreal, Maine and Atlantic Railway (“MMA”) and will consider and address unique reorganization issues arising in mass tort cases, such as:
The panel consists of:
Time: 7:30 – 8:45 AM
Registration is available at www.aira.org.
Join AIRA at the 89th Annual NCBJ Opening Reception on Sunday night from 5:30 – 7:30 PM. Network with your friends, colleagues and contacts while enjoying cocktails and hors d’oeuvres. AIRA would like to acknowledge the generous sponsors of this event that honors the Bankruptcy Judges and welcomes guests to NCBJ — Bloomberg, CBIZ, Conway MacKenzie, Deloitte, Friedman LLP, Huron Business Advisory, and Protiviti.
Since 1999, Pachulski Stang Ziehl & Jones has hosted the official NCBJ “After Party.” The nation’s leading corporate restructuring boutique is well known in the bankruptcy and restructuring community for its standing room only themed parties, and this year expect nothing less than the best.
2015’s National Conference of Bankruptcy Judges Conference is in Miami and, on Tuesday, September 29, we will present “La Hora Loca,” which means “The Crazy Hour.”
As you can see from our 2014 Gatsby-themed Chicago pics, it is our goal to have the stars of the bankruptcy world eating and dancing after a few days of serious learning.
We hope to see you in Fontainebleau’s Glimmer Ballroom on September 29, 2015 from 10:00PM – 2:00AM.
Pachulski Stang Ziehl & Jones LLP (@pachulski)
How did the “Spite Wall” come to be? It all started in 1948 when Ben Novack teamed up with the “Tire King,” Harry Mufson, to build a grand hotel in Miami Beach. The acclaimed Miami Beach Saxony Hotel, designed by Roy E. France, had just opened. Novack and Mufson commissioned France to design their new hotel, the Sans Souci, to surpass the Saxony.
Novack, dissatisfied with France’s design, sought out another architect for something more flamboyant. A friend referred Novack to Morris Lapidus, known for his quirky but innovative style designing retail stores. Using a Lapidus modified France design, Novack and Mufson built the San Souci Hotel (now called Hotel Riu Florida Beach).
Novack and Mufson then wanted to build an even grander hotel. Novack convinced Lapidus to design the new hotel for a ridiculously low fee. Novack located a large tract of land on the Miami Beach shoreline for the project. Shortly before the land acquisition, Mufson accused Novack of double crossing him by taking money from the San Souci to the purchase the land in Novack’s name alone. After lawyers got involved, Novack raised funds from other investors to purchase the land and to build the hotel, without Mufson. Two years later, in 1954, Novack built his grand hotel and called it the Fontainebleau. Novack banned Mufson from the Fontainebleau.
After construction of the Fontainebleau, Novack and Lapidus had a falling out. Lapidus believed Novack wanted to cheat him on his already low fee. Lapidus got so angry he chased Novack around the Fontainebleau swimming pool swinging a piece of lumber.
Mufson, still smarting from his run-in with Novack, decided to build a hotel next to the Fontainbleau, and to use Lapidus for the design. Mufson would call his hotel the Eden Roc. When Novack learned of the plan, he remonstrated Lapidus not to design the Eden Roc. When Lapidus rejected Novack’s protestations, Novack was furious. After Lapidus designed the Eden Roc, Novack forbade Lapidus, as well as Mufson, from ever setting foot on the Fontainbleau property. The Eden Roc opened in December 1955.
Still incensed by Mufson and Lapidus teaming up to develop the Eden Roc, Novack hatched a plan of revenge. Novack acquired a 99-year ground lease of the parking lot that separated the Fontainbleau and Eden Roc. He then constructed a 14-story guest room addition to the Fontainebleau, called the Chateau, near the Eden Roc property line. Except for a few windows penetrating Novack’s penthouse apartment in the Chateau, the entire back side of the new addition that faced the Eden Roc was a windowless, unsightly grey concrete wall. Novack strategically positioned the wall to cast an afternoon shadow over the Eden Roc swimming pool. Rumor has it that Novack installed the windows in his apartment so he could look at the Eden Roc and gloat, or spit at it. The wall came to be known as the “Spite Wall.” Years later, a more cooperative owner of the Fontainebleau learned that Novack intentionally built the Spite Wall to make it prohibitively expensive to cut additional windows.
In litigation between Mufson and Novack over the Spite Wall, which made national news, the court ruled against Mufson, holding there is no common law right to the flow of air and light across the land of a neighbor, and rejected a claim of private nuisance. Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc., 114 So.2d 357 (Fla. App. 1959) involved an interlocutory appeal of the district court’s injunction halting construction of a fourteen-story addition to the Fontainebleau. In the opinion, the court details the size and location of the addition and describes the shadow it casts:
“[T]he Eden Roc Hotel, which was constructed in 1955, about a year after the Fontainebleau … adjoins the Fontainebleau on the north…. The proposed addition to [the] Fontainebleau is being constructed twenty feet from its north property line…. The 14-story tower will extend 160 feet above grade in height and is 416 feet long from east to west. During the winter months, from around two o’clock in the afternoon for the remainder of the day, the shadow of the addition will extend over the cabana, swimming pool, and sunbathing areas of the Eden Roc, which are located in the southern portion of its property.”
In rejecting the claim of common law easement, the Appellate Court stated “that we have no desire to dissent from the unanimous holding in this country repudiating the English doctrine of ancient lights.”
That forced Mufson, at considerable expense, to build a second swimming pool away from the shadow.
In 2007, a new owner of the Eden Roc erected a condominium addition to hide the Spite Wall. The result was two windowless, towering solid walls facing each other, only about forty feet apart. Who was it that said, Truth is stranger than fiction? [Hint, Mark Twain].
Source: Mostly from the book, Fool’s Paradise by Steven Gaines or the cited opinion.
The sand and sun from Miami Beach are waiting to greet you at the 22nd Annual IWIRC Fall International Conference at the Eden Roc Miami Beach Hotel in Miami FL on September 26th and 27th. The IWIRC International Fall Conference kicks off on Saturday, September 26th with an opening reception at the Eden Roc’s Ocean Garden from 5:30 -7:30 pm. Join in on IWIRC’s hottest reception and network with over 250 attendees and bankruptcy judges from around the country, as we overlook the beautiful beach while enjoying cocktails, tapas and great company. This will be a reception you do not want to miss! For more information or to register for the IWIRC Fall Conference click here or visit our website at www.iwirc.com. We look forward to seeing you in South Beach!
IN THE BEGINNING
The Fontainebleau has an interesting, colorful history. It began with when Ben Novack Sr. dreamed of building the world’s greatest hotel in Miami Beach. His dream was made possible by World War II. During the war, the U.S. Army requisitioned over 180 hotels and 100 apartment buildings in Miami Beach. As the owner of several hotels, Ben’s contracts with the Army made him rich. With an initial budget of $10 million, a loan of $5 million and 11 investors, in 1954 Ben built the Fontainebleau on an estate purchased from heirs of the Firestone fortune. The Hotel, when finished, cost $16 million, a huge sum in the day.
Ben enlisted Russian born American architect Morris Lapidus to design the Fontainebleau. He hired Lapidus at a bargain price, which almost led the architect to financial ruin. In his day, critics reviled the excesses of Lapidus’ designs, calling his architecture “the nation’s grossest national product,” “pornography of architecture,” and “boarding house baroque.” It was not until the post-modernism period of the late 1980s and beyond that critics began to appreciate Lapidus’ work.
The Fontainebleau, when it opened in 1954, was the height of excess. Lapidus punctuated his design with 27 colors of paint, woggles shaped like an artist’s palette, boomerang and table shaped cutouts in ceilings, amoeba-like cutouts in walls, Swiss cheese holes, beanpoles, and metal rods supporting nothing. Bellboys wore gold braided purple uniforms. There was a “Staircase to Nowhere” so women dressed in couture and jewels could take an elevator to the top to deposit their coats and glamorously descend the stairs to the lobby. Ben’s wife Bernice, a former model, descended those stairs on many occasions decked in beautiful gowns. Marble floors were inlaid in a bow-tie motif, patterned after Lapidus’ signature bow-tie attire. Photos of some of these architectural features appear on the Hotel website and app.
Lapidus adhered to the following principles in designing the Fontainebleau:
In 1955, Lapidus designed the Eden Roc Hotel for Ben’s former estranged partner, Harry Mufson. Ben was so incensed that he banned Lapidus from the Fontainebleau for life and built an addition with an unattractive wall facing the adjacent Eden Roc – which came to be known as the “Spite Wall” – that cast its pool in an eternal afternoon shadow. In litigation that made national news, the court ruled against Mufson, holding there is no common law right to the flow of air and sunlight across the land of a neighbor, and when a structure serves a useful and beneficial purpose it does not give rise to an action in nuisance for damages. That forced Mufson, at considerable expense, to build a new second pool away from the shadow.
Ben Novack Sr. ran the Fontainebleau for 24 years from the time it was built until it was sold in 1978. He and his wife, Bernice, resided in a palatial 14th floor apartment in the Hotel’s Chateau building, called the Governor’s Suite, where they raised their son, Ben Jr. The Fontainebleau was popular among the Hollywood crowd, attracting the likes of Marlene Dietrich, Frank Sinatra, Dean Martin, and Jackie Gleason. Elvis Presley, Lucille Ball, Judy Garland, and Bob Hope entertained at the Hotel. Scenes from The Bellboy (1960) and Goldfinger (1964) were filmed on the premises. On the penthouse floor, John F. Kennedy stayed in suite 1784 and Marilyn Monroe in suite 1782.
In the late 1960s and into the 1970s, the Fontainebleau declined along with Miami Beach generally. The Hotel lost much of its luster. Miami Beach tourism declined. Many hotels filed bankruptcy. In 1977 Time magazine called Miami Beach a “seedy back water of debt-ridden hotels.” In April 1977 the Fontainebleau filed for reorganization in the Southern District of Florida. Several months later, Ben filed a personal bankruptcy case.
In 1985, when critics still did not appreciate his work, Lapidus burned the designs of his life’s work, including the drawings and plans of the Fontainebleau.
Ben died of a heart attack in 1985 at age 78. Ben’s son, Ben Jr. and 86-year-old Bernice were murdered in 2009. Ben Jr. had left the bulk of his property, including his warehouses of Batman collectibles, to his wife Narcy. In 2012, Narcy and her brother were sentenced to life in prison for hiring hit men to kill Ben Jr. and Bernice. Following Narcy’s disinheritance, a five-year battle ensued over Ben Jr.’s dwindling estate involving a legion of family members, long-lost relatives and a possible illegitimate child. Lapidus died in 2001 at age 98 a wealthy man.
In 1978, Hotelerama, owned by Stephen Muss, purchased the Fontainebleau out of bankruptcy for $27 million. In In re Bleaufontaine Inc., 634 F.2d 1385 (5th Cir. 1981), the Fifth Circuit dismissed an appeal of a bankruptcy court order approving the sale as moot, upholding the bankruptcy court’s finding that Hotelerama was a good faith purchaser even though a secured creditor of the bankrupt owned a disclosed 25% interest in Hotelerama.
Hotelerama brought in Hilton to operate the Hotel, renaming it the Fontainebleau Hilton Resort. Muss held a “Destruction Party” to celebrate a $40 million renovation. The renovation did not preserve the Hotel’s original design. Muss covered the white marble bow-tie inlaid floors with with green carpet. He cut a hole in the lobby floor to install an escalator. He removed much of the Hotel’s ornamental work. He installed a water-park to attract families. He converted the Staircase to Nowhere to a stairway to the mezzanine housing the Hilton offices.
In 2005, at the height of a real estate boom, the Jeffrey Soffer family bought the Fontainebleau from Stephen Muss for $167 million. Soffer engineered a $1 billion renovation of the Hotel from 2006 to 2008. Mariah Carey performed at the grand reopening on November 13, 2008, which coincidentally coincided with the outset of the Great Recession. Kate Hudson, Martha Stewart, Gwyneth Paltrow, Heidi Klum, Alex Rodriguez, and Paris Hilton were among those in attendance.
The Fontainebleau survived the recession thanks to a workout with its lenders. Jeffrey Soffer’s other Fontainebleau project, Fontainebleau Las Vegas, did not fare so well. Construction financed by a $1.85 billion credit facility halted on the 70% completed structure, with a cost to complete estimated at $1 to $1.5 billion. In February 2015, Bank of America, the lead lender, agreed to pay other members of the lender group $300 million to settle a lawsuit. A Carl Ichan owned entity bought Fontainebleau Las Vegas in a bankruptcy sale for approximately $150 million. Ouch! It remains uncompleted today.
The goal of the $1 billion renovation of Fontainebleau Miami Beach was to restore Lapidus’ original design by replicating and reinterpreting his design elements. The restoration effort was hampered by Lapidus’ burning of his drawings and the plans for the Fontainebleau in 1985. The Staircase to Nowhere was preserved but brought up to code. The escalator is gone. The bow-tie pattern on the marble floor was recreated using new materials. The waved-formed canopy above the doors from the lobby to the pool was restored. The wooden reception desk was returned to its original location, but this time featuring blue-grey mirror glass with a polished nickel frame. Much of the ornamental work has been recreated. There are columns, newly wrapped in glass and mini brick tiles. Belgian gold chandeliers, each with 1,800 crystal strands, again adorn the lobby. For additional flair, the Bleau Bar was given an intense blue floor lit from below with galaxy-like arcs of light above. As part of the renovation, the room count increased almost two-fold to 1504 (658 suites in two new all-suite towers and 846 rooms in the two original buildings). There was newly constructed a massive swimming pool, a 40,000 square foot spa, a health club, twelve restaurants and lounges, a 38,000 square foot ballroom, and 58 meeting rooms totaling 107,000 square feet.
For more information about the Fontainebleau and greater Miami Beach, I recommend the book Fool’s Paradise by Steven Gaines, which my wife Robin recommended to me. Photos of the Fontainebleau, both past and present, are posted on the Hotel’s app and on its website. The extensive Hotel app covers a wide range of topics. The 360 tour of the Chateau lobby under the Play tab is pretty cool. A particularly interesting article by Gary Cohen with photographs from the private collection of Bernice Novack, entitled Swinging at The Fontainebleau: How a once-in-a-lifetime hotel defined Miami Beach luxury and became an American icon, can be found at http://www.siqueiros.com/oceandrive/hybrid/archives/2002_mar/fontainebleau/fontainebleau.html.
The renovated Fontainebleau is grand but expensive. I look forward to seeing it for myself.
Sources: The information for this article was derived from a wide variety of sources. It is only as accurate as the sources.
On July 22, 2015, the well regarded Miami South Beach Nightclub, The Cabaret, ranked #1 of 81 in Trip Advisor’s Nightlife in Miami Beach category, closed. The Miami Herald reported the closure followed a Notice of Eviction by the landlord. Romans Chapter 11 verse 11 states: Have they stumbled that they should fall? [B]ut rather through their fall salvation is come…. Chapter 11 did not come in time to save The Cabaret.
Bible Translation: King James Version
Miami Beach Art Deco District
During the NCBJ conference, be sure to see some of the Art Deco buildings in the Miami Beach Art Deco District. The Miami Beach Art Deco District rose from the ashes of a 1926 hurricane that ravaged the area and left some 400 dead. According to the National Register of Historic Buildings, there are over 800 Art Deco structures in the District, mostly built between 1923 and 1943.
The Fontainebleau Hotel is located at 4441 Collins Avenue, about 2.2 miles from the northern end of the Miami Beach Art Deco District. The District stretches about 1.5 miles north to south. Many interesting Art Deco structures line Ocean Drive and Collins Avenue and nearby streets.
Swiss-French architect, designer and urban planner, Charles-Édouard Jeanneret-Gris, better known as Le Corbusier, is credited with coining the term Art Deco in a series of articles about the Exposition Internationale des Arts Décoratifs et Industriels Modernes written under the headline “1925 Expo: Arts Déco.” British art historian and journalist Bevis Hillier popularized the term some four decades later to refer to a broadly applied stylistic label in his 1968 book, Art Deco of the ‘20s and ‘30s.
According to the Encyclopedia Britannica:
“The distinguishing features of the style are simple, clean shapes, often with a ‘streamlined’ look; ornament that is geometric or stylized from representational forms; and unusually varied, often expensive materials, which frequently include man-made substances (plastics, especially Bakelite; vita-glass; and ferroconcrete) in addition to natural ones (jade, silver, ivory, obsidian, chrome, and rock crystal). Though Art Deco objects were rarely mass-produced, the characteristic features of the style reflected admiration for the modernity of the machine and for the inherent design qualities of machine-made objects (e.g., relative simplicity, planarity, symmetry, and unvaried repetition of elements).”
National Geographic Traveler describes the buildings in the Miami Beach Art Deco District as “fanciful pastel buildings, with porthole windows, ship-like railings, sleek curves, glass blocks, shiny chrome, and gleaming terrazzo floors . . . .” It goes on to call the District “prime eye candy.”
A good place to start is at the Art Deco Welcome Center, 1001 Ocean Drive. You can sign up on the Center’s website up to two weeks in advance for a guided walking tour ($25 per person, or $20 with a senior or student discount) or obtain information at the Center from 9:30 am to 5:00 pm about taking your own self-guided audio walking tour. Guided tours start at 10:30 am Monday through Sunday, and also at 6:30 pm on Thursdays. Advance tickets are not required. The Welcome Center has its own museum, complete with scale models of buildings that illustrate structural design elements not only of the District’s Art Deco style but also of other buildings in the District built in the Mediterranean Revival or so called Miami Modern style.
Traveling south to north by foot, these are some of the more interesting art deco buildings you will see:
Along the way, visit Lummus Park, a 74-acre public, urban park located at Ocean Drive and 7th Street.
I am looking forward to taking a walking tour of the Art Deco District, and will bring my camera.