Timeline: Penn-Florida Countersues Madison Realty Over Boca Tower

Penn-Florida Companies has countersued its lender, an affiliate of Madison Realty Capital, in New York state court, seeking more than $500 million in damages over the stalled Mandarin Oriental Residences in Boca Raton. Via Mizner Owner III LLC and Via Mizner Pledgor III LLC, the Penn-Florida entities behind the long-delayed 105 East Camino Real project, filed the suit against Via Mizner Lender 1 LLC and Via Mizner Lender 2 LLC on Thursday, August 13, in New York Supreme Court’s Commercial Division. The complaint, led by Penn-Florida president and CEO Mark Gensheimer, alleges Madison Realty “created the defaults” it is now using as grounds to seize the project.

Timeline

2017: Penn-Florida secures its original construction loan from Madison Realty for the Via Mizner site.

Aug. 2023: Madison Realty leads a $270 million refinancing of the construction debt.

June 2024 to Feb. 2025: Via Mizner Owner III stops paying interest, misses the loan’s maturity, and lets the hotel management agreement lapse, per the lender’s later complaint.

July 6, 2026: Strategic Group Builders files a separate $24 million construction lien suit against Via Mizner Owner III and its lenders.

July 17, 2026: Via Mizner Lender 1 LLC files the $417.7 million mortgage foreclosure suit in Palm Beach Circuit Court, case 502026CA008027XXXAMB.

Aug. 13, 2026: Via Mizner Owner III and Via Mizner Pledgor III sue Via Mizner Lender 1 and Via Mizner Lender 2 in New York, seeking $500 million-plus and alleging the lender manufactured the defaults behind both the mortgage foreclosure and a separate UCC foreclosure of pledged equity interests.

Since filing: New York Supreme Court Justice Andrew Borrok has signed an order temporarily blocking Madison Realty’s UCC auction of the pledged interests, with a hearing set for October 1.

Why it matters

A borrower suing its lender for allegedly engineering its own defaults is an aggressive posture, one South Florida sponsors in workouts with Madison Realty will read closely. A New York judge freezing a UCC auction on the borrower’s say-so, even temporarily, tells other distressed sponsors a countersuit is a live lever against a lender moving to seize collateral, and that Madison Realty’s leverage here is less absolute than a $417.7 million claim alone suggests.

The numbers

Penn-Florida seeks more than $500 million, against the $417.7 million the lender claims is owed under the mortgage. The site is 1.49 acres, holding a partially built 85-unit condo tower and roughly 163-room hotel, with no market-rate sale since 2007. The New York UCC action targets pledged equity interests, a mezzanine-style structure distinct from the real property mortgage at issue in Palm Beach.

What’s next

The October 1 hearing decides whether the UCC auction proceeds or stays blocked. Watch the Palm Beach Circuit docket for the mortgage foreclosure in parallel, and whether Mandarin Oriental Hotel Group’s brand agreement survives a change of control under either track. More South Florida coverage.