Romspen Faces A $130 Million Hit! Owners Of The Mandarin Oriental In Boca Raton Files Bankruptcy For 2nd Time

Canadian commercial lender Romspen is on life support and everyone in the finance world knows it. Romspen now is faces a $130 million hit. This is on top of the billions of dollars of non-performing debt they already hold. Which of course is a result of a continual pattern of bad decision making by inept Romspen leadership. 

Here Is What Happened

When the fallout of financial crisis of 2008 began to subside developers flocked back to Florida. Developers like Penn Florida CEO Mark Gensheimer were no different. In 2015, Gensheimer convinced Hong Kong based Mandarin Oriental to let him open a resort under their flag.

Long time Hong Kong investment company Jardine-Matheson Holdings, Ltd. started the ultra luxurious hotelier in 1963.

Gensheimer initiated plans to construct the project through three new corporate entities. He named them Via Mizner Owner I, Via Mizner Owner II and Via Mizner Owner III. Developers often do this to limit liability if something goes wrong during the development. 

Construction along Federal Highway was an eyesore. However, Gensheimer asked Boca Raton residents for patience. 

However, in 2020, the Covid-19 pandemic hit and everything came to a screaching halt. Contractors starting going bankrupt. This forced Via Mizner Owner I to file bankruptcy and dissolve this past January (Case #25-10369-EPK).

The Mandarin Oriental Project Begins To Fall Apart

Romspen had no connection with Via Mizner Owner 1. However, it did set off alarm bells in Toronto. Why? Well, Romspen had invested heavily in Via Mizner Owner II by lending them $148 million in 2021.

Romspen could see their demise spray painted on the walls outside the project Via Mizner Owner I BK. As a result, they decided to do what they needed to limit their risk. So, Wesley Roitman and Romspen renegotiated debt terms with Gensheimer and Via Mizner Owner II. They lowered the loan terms from $148 million to $130 million. Unfortunately, that wasn’t enough to keep Via Mizner Owner II out of bankruptcy. To make matters worse, they named Romspen as a creditor (Case #25-25197-MAM).

The $130 million hit could not have come at worse time for Romspen. Nearly 75% of their portfolio is made up of non-performing loans. On top of that, they have also incurred nearly $30 million in legal fees on defaulted debt they will never collect. Oh annd let’s not forget the $3+ million they have spent on suing MFI-Miami in a frivolous lawsuit.