Jailed Ponzi schemer Scott Rothstein owes nightclub owner Mike Kent $1.4 million on a mortgage on one of two side-by-side waterfront Rhode Island homes Rothstein purchased from him during the past few years.
You might think Kent would have to stand in line like so many others who are demanding hundreds of millions of dollars from Rothstein in bankruptcy court, but it looks like Kent, a squat and brash businessman, might be the first to get his money with a sale of one of those homes on the ocean-access Great Salt Pond in Narragansett.
Some might wonder if Kent should get any of that money at all. But before we get into Rothstein's Rhode Island real estate quandary, let's remember Kent's colorful history in Fort Lauderdale.
Back toward the beginning of the past decade (what is it called? the double oughts?), the beach of Fort Lauderdale was dominated by a controversy at a popular nightspot owned by Kent called Club Atlantis. At the club, Kent was engaged in a mighty pursuit to allow teenaged girls and boys to mingle with booze-swilling adults. The city, in October 2000, passed an ordinance aimed squarely at Atlantis to ban the under-21 crowd from drinking establishments in the city. That started a veritable war between Kent and the city, with Kent "hiring" under-21 clubgoers as "promotional assistants." Police didn't buy it and raided the club after midnight on a semiregular basis, often arresting club managers.
Kent, who owned 20 nightclubs in Rhode Island and other states at the time, cultivated the chaotic circus, playing hardball and vowing, if he lost his battle with the city, to transform Atlantis into some sort of obscene monstrosity he would call "Uranus." From a Sun-Sentinel article in March 2001: "Kent has vowed to sue on every angle and in any court possible, until he either has the under-21 law thrown out as unconstitutional or he loses and in anger transforms the club into something called "Uranus," which he declined to describe except to say: "'You'll have to
come explore Uranus to find out. The graphics they're going to love.'"
When the city tried to set bar closing times on the beach at 2 a.m. after a shooting near Atlantis, Kent responded, "I'm not closing at 2. They can kiss my ass."
The lawyer representing Kent in the battle was none other than Rothstein, then an obscure workaday attorney living in Plantation. "We are not going away," Rothstein told the newspaper. "We are not going to let the city bully us and push us around and force us out of town. It's not going to happen. Not today, not tomorrow, not ever."
Kent was Rothstein's highest-profile client to date. Ultimately the Atlantis contoversy died down and the club was sold. But the business relationship between Kent and Rothstein apparently lived on, at least when it came to real estate.
The home at 11 Bluff Hill is being seized by the feds, said attorney Bill Scherer, who is representing creditors in the Rothstein bankruptcy. But because of the Kent mortgage, it appears the feds are foregoing the seizure of 15 Bluff Hill, he said. "They won't chase anything if they don't think it has enough value," said Scherer, who added that Kent had contacted his law firm about the house. "It's up to the feds."
Kent was set to auction off the house at 15 Bluff Hill on December 30 to recoup his $1.4 million, according to public records, but the sale of the house was postponed for unknown reasons until January 20.
There are legal issues here that I surely don't understand, but here are some questions from a layman:
If Rothstein grossly overpaid for the home, should Kent still be due that $1.4 million?
Why did Rothstein buy two furnished homes in Rhode Island that just sat empty?
Should the feds investigate the relationship between Rothstein and Kent before allowing any sale to occur?
Should the feds seize the home, sell the home for assets, and let Kent stand in line for what he is owed like the rest of the creditors?
The problem, of course, is that the feds are terribly short-staffed, so mysteries like this, which involve relatively small sums of money, get shuffled under the rug. The answer: Bring FBI and IRS reinforcements to South Florida to do this investigation right, rather than by the seat of the government's pants.
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-- As an aside, I was out of town and finally had a chance to read the comments from the last post on Hurley. The one that struck me most was the oft-provocative KevinK's defense of Hurley for taking four months of someone's life for cursing at him and cracking wise in court.
To me, Hurley's hitting the guy with all that jail time for giving him some guff only symbolizes the obscene arrogance of Hurley and other lawyers/judges in this burg, many of whom are at least partly responsible for the sorry shape that it is in. (Remember, Rothstein loved to hire former judges and prosecutors, and they flocked to him.)
Remember that we supposedly put freedom of speech at a premium in America. Criticizing a judge, even in a courtroom and even with cuss words, shouldn't land anyone in jail for four months. Sounds more like China to me. The guy was no threat. There were bailiffs there to take him out of court and put him back in jail until he's ready to behave.
Judges are supposed to be working in service of us, not acting like mini-monarchs on the bench. And the behavior of some judges, as Christy noted, deserves all the verbal abuse that can be heaped upon them. Part of what this blog needs to do is break these judges down, show people that they are humans, and, in some cases, that they are deficient and dishonest and power-corrupted ones at that. Then we might get a little more justice in this town.