Brazilian developer Gilberto Bomeny is challenging the outcome of a recent auction for his downtown Miami property at 340 Biscayne Boulevard, currently occupied by a Holiday Inn. Entities controlled by Bomeny have filed a motion in federal bankruptcy court to set aside Cirrus Real Estate’s $77 million winning bid and call for a new auction, alleging irregularities in the sale process.
According to the Dec. 25 court filing, Bomeny’s entities claim that “constant changes and irregularities” in the auction shut out other potential bidders. The dispute will be addressed at a hearing before U.S. Bankruptcy Judge Laurel Isicoff on Wednesday, Dec. 31. The judge will decide whether to approve Cirrus’ purchase or reopen bidding for the nearly one-acre site, which has city approval for an 82-story mixed-use tower.
Bomeny’s group bought the hotel in 2015 for $65 million but filed for Chapter 11 bankruptcy protection earlier this year after defaulting on a $70 million loan from an affiliate of Cirrus Real Estate. The auction was authorized last month by Judge Isicoff, who also approved a credit bid of up to $101.5 million by the Cirrus affiliate, identified as the largest creditor.
The contested online auction was managed by Sotheby’s Concierge Auctions and scheduled initially for 6 p.m. on Dec. 17. According to Bomeny’s motion, Sotheby’s changed the start time twice before finally beginning around 2:30 p.m., with little notice to interested parties. On auction day, one of Bomeny’s agents could not access the platform at the announced time and was told by online support that bidding would begin later that evening; however, bidding actually occurred earlier that afternoon.
Cirrus was reportedly the only participant in the online sale. The motion alleges that multiple prospective bidders were unable to register or pay fees due to technical issues and last-minute schedule changes communicated poorly by Sotheby’s Concierge Auctions. Brokers told Bomeny they had clients prepared to make offers—including at least one willing to bid almost double Cirrus’ offer—but were unable to participate under these circumstances.
“If the judge approves Cirrus as the winner, no other creditors would receive any proceeds from the sale of 340 Biscayne,” according to Bomeny’s motion. The request asks for a new auction date of Feb. 9.
Attorneys representing both Bomeny’s entities and New York-based Cirrus Real Estate did not respond to requests for comment.
