Ever see that photo of the python that tried to swallow an alligator-- and the gator explodes out the python's side as it's being digested? Or watch animal combat videos on YouTube, with great predators of the planet going at it tooth and claw? That's how we feel reading about local lords of the capitalist jungle as they tear at each other in courtroom battle. But where the animals are awesome, the humans are, for all their wealth and power, merely sordid.
Case in point is that of Palm Beach construction magnate Dan Catalfumo and Broward banking power Alan Levan, now embroiled in legal warfare in federal bankruptcy court. The latest turn is Levan's charge that Catalfumo has engaged in "fraudulent transfer of more than $64.5 million dollars" to offshore banking accounts to avoid paying his creditors.
Catalfumo once bestrode the land a colossus, since 1978 leaving his construction company's imprint on 35 million square feet of property including the West Palm Beach and Palm Beach County government centers, the Port of Palm Beach Cruise Terminal, and a good swathe of commercial and residential development in northern Palm Beach County. His personal life, all the while, devolved into a debauched soap opera.
Among Catalfumo's leading lenders during that time was Alan Levan's Fort Lauderdale-based BankAtlantic, a $4 billion institution popularly known for its naming rights to BankAtlantic Center (now BB&T Center). In an April 17 court document, Catalfumo stated that he "was one of the largest, if not the largest" of the bank's clients.
The Catalfumo empire came crashing down in the Great Recession and real estate market collapse of 2008. By 2011 he was facing lawsuits for more than $100 million in debts, with BankAtlantic at the head of the pack.
Catalfumo's company, PGA Flyover Corporate Park, filed for bankruptcy April 17, in part, the bankruptcy petition states, "to resolve the wasteful scorched earth litigation tactics engaged in by [Levan's] BBX Capital Management." Catalfumo alleged that, in an effort to collect on a 2011 $41 million judgment against him, Levan had filed suit in Florida and South Carolina state courts, the Cayman Islands and the Island of Jersey (both banking havens) -- a total just in Florida of lawsuits against "more than 50 persons and entities allegedly related to Mr. Catalfumo"
Levan fired back April 24, asking the court to dismiss the bankruptcy as a "bad faith" filing, intended to shield the millions Catalfumo allegedly secreted offshore. In sum, Levan wrote:
Though the bankruptcy petition was nominally filed in the name of PGA Flyover, it is evident that the petition has been filed in bad faith for the benefit of the Debtor's principal who is the real party in interest and beneficiary of these proceedings. Indeed, the bankruptcy plan seeks to provide Catalfumo with all the benefits of a bankruptcy without any of the burdens, and without submitting himself or his ill-gotten assets to this Court's jurisdiction.
Catalfumo claims that Levan and BBX knew of the transfers, already hold collateral equal to 2 1/2 times the value of Catalfumo's debt, and are stalling on collection to drive down the valuation of the collateral. He says he intends to pay off his debts "100%."
Levan's no cream puff. Under his leadership, BankAtlantic in 2006 paid a $10 million fine rather than face charges of laundering Colombian drug money. In 2008 it sued a bank analyst who issued a report saying the bank was in trouble, losing the case two years later -- at which time the bank's share price had fallen from a high of $100 a share to $1 a share.
Levan sold his interest in BankAtlantic to BB&T Corp in 2011, completing the sale last September. But his company BBX held on to the $41 million claim against Catalfumo. Levan may need the money. In January 2012 the SEC sued BBX for securities violations at BankAtlantic in 2007. The recent merger of BBX with another Levan entity has drawn the interest of class action lawyers.
We don't know who's going to come out on top in the struggle between Levan and Catalfumo. But it won't be any little guys.
Fire Ant -- an invasive species, tinged bright red, with an annoying, sometimes-fatal sting -- covers Palm Beach County. Got feedback or a tip? Contact Fire.Ant@BrowardPalmBeach.com.
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