Thomas Kramer: SoBe Bad Boy to Declare Bankruptcy, Live Off Friends
Real-estate developer Thomas Kramer was once worth $100 million. The German-born bad boy was a South Beach pioneer and a stalwart of the party scene in the 1990s. Lately, he has suffered severe financial problems, the result of a $244 million Swiss court judgment against him.
Now he has told lawyers that he "is going to declare bankruptcy, probably," according to a deposition he gave in a civil lawsuit last month at the law offices of Kozyak Tropin & Throckmorton in Coral Gables. But, hey, it's not over. He says he has $300,000 left in a Dubai bank account.
Kramer spoke in a civil suit over money he borrowed decades ago to buy South Beach property and never repaid. Dressed like an aging rock star in a camouflage hoodie and stars-and-stripes neck scarf, he seemed oddly chipper as lawyers representing Verena Mitshke-Colande and Claudia Miller -- heirs to Germany's largest currency-printing company -- grilled him about his assets.
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The tone for much of the grueling six-hour deposition, which New Times viewed, was set at the beginning when he was asked if he suffered from any medical conditions that would impair his ability to answer questions.
"Only brain damage," quipped the hard-partying entrepreneur.
Indeed, Kramer treated the event as a bit of a joke and answered most questions with either "I don't recall" or "Ask my accountant." Quizzed about how he would support himself after his money ran out, Kramer said he planned to live with family and friends.
"I'm everywhere invited, so they are going to help me," he said.
Eighteen months ago, Kramer inherited $3.3 million from the estate of his late father, Willi Kramer, a wealthy stockbroker. So the lawyers for Mitshke-Colande and Miller -- heirs to a business magnate who improperly lent Kramer cash in 1992, just as South Beach real estate was taking off -- wanted to know where all that money went.
Thomas Kramer (center).
According to Kramer, a big chunk of the dough went toward repaying his debts. "I had $1 million wired over to my account right away to pay back what I owed," Kramer said, adding that $100,000 went to his longtime friend and neighbor Marc Iacovelli and another $100,000 went to Telemundo anchor Maria Celeste. The rest of the money that was wired to his Miami account, Kramer claimed, he spent paying attorneys, accountants, and credit cards, which he relies on for traveling. "Anything to keep the machine running," he said.
Kramer said he deposited the remaining $2.3 million into the account of Alpha Beta Universal LLC, a Dubai company in which he holds a minority stake. He used that cash to pay staff and the monthly upkeep of his Star Island mansion, his last remaining major asset. That property, which has 29,000 square feet and 13 rooms, is now on the market for $55 million.
Kramer, however, admitted that since his appeal was denied in Swiss court in January 2013, he has drastically cut back on spending: "I cut my costs to about $40,000 to $50,000 a month. When I lost the last appeal, I cut my staff by 80 percent. I cut my costs down to where I just barely handle the expenses. Obviously, I am not paying the property taxes on the house; that's another $1.8 million outstanding."
He also revealed that the deal he struck with Pakistani plutocrat Malik Riaz to build an island city off the coast of Karachi, a plan he hoped would catapult him back into the big leagues, had collapsed. "It was an economic nonevent," he said. Asked if the deal was dead, Kramer replied, "The memorandum said that we were supposed to raise $20 billion within three months to continue, and I wasn't able to do that, so I guess it is."
Toward the end of a long day, Kramer's sunny disposition darkened when he was asked if his mother was still alive and whether he expected an inheritance from her. "I didn't discuss it with her," he replied. "I hope she stays alive a long time. What a question!"
Then tears welled up in Kramer's eyes.
"Do you need to take a minute?"
"No, go on. Only stay over the belt line, please."