[Just filed. Developing story] May 2, 2022 – WC Braker Portfolio, LLC (“WC Braker” or the “Debtor”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Western District of Texas, lead case number 22-10293 (Judge Tony M. Davis). The Debtor, owner of a 13-building office complex in Austin, Texas called "the Offices at Braker," is represented by Todd Headdon of Hayward PLLC.
The Debtors’ lead petition notes between 1 and 50 creditors; estimated assets between $100.0mn and $500.0mn; and estimated liabilities between $50.0mn and $100.0mn.
The Petition is signed by Natin ("Nate") Paul, the Austin, Texas-based developer/investor who last week won a reprieve from foreclosure efforts when a New York County Supreme Court judge issued a preliminary injunction to keep ATX Braker, a shell company that Los Angeles-based Karlin Real Estate owns, from proceeding with a scheduled April 14th UCC foreclosure sale of the Braker portfolio. Documents filed in respect of the New York case note that the Debtor owes ATX Braker $29.0mn in respect of mezzanine loan and also has an approximately $63.0mn mortgage loan with JP Morgan. The Debtor, which allegedly defaulted on the mezzanine loanupon occurence of a March 9th maturity date, claimed in the New York proceeding that it wasn’t properly notified of the foreclosure action. This is not an unfamiliar pattern for those who have watched Mr. Paul's frequent use of the bankruptcy courts, including in respect of the GVS cases (defined just below) where he also dodged foreclosure efforts launched by mezzanine lenders by putting his GVS assets into bankruptcy.
As reported, Mr. Paul is looking to rebuild his once considerable property portfolio following better than expected results in a section 363 sale of his GVS self-storage properties.
On March 22, 2022, entities controlled* by Mr. Paul (GVS Texas Holdings I, LLC and 13 affiliated Debtors, or “GVS,” see list of affiliated cases below) notified the Court that as of that date (i) their Plan of Reorganization had become effective and (ii) their $580.0mn sale of substantially all of their assets to stalking horse CBRE WWG Storage Partners JV III, LLC had closed [Docket No. 882]. Confirmation (and effectiveness) of the Debtors' Plan followed a March 15th "Stipulation and Agreed Order with World Class Holdings I, LLC" (the “WCH Order”) [Docket No. 852] which could see the the much maligned Natin Paul "as the sole officer and director of the Debtors" and sitting on over $100.0mn of asset sale proceeds (see our seprate coverage of GVS).
*Mr. Paul's return to GVS continues to hinge on the outcome of an ongoing investigation relating to alleged post-petition improprieties that ultimately led to a November 2021 "Governance Order" that saw Mr. Paul removed entirely from any involvement with, or management of, GVS.
The fact of the Governance Order pretty much summed up the universally shared (and low) opinion of Mr. Paul and followed multiple calls for the Debtors' cases to be converted to Chapter 7. That opinion, however, was largely rendered moot by the GVS asset sale proceeds that are comfortably more than enough to pay off everyone and effectively make Mr. Paul's accumulated shade (at least as to the GVS debtors) go away. If Mr. Paul can overcome the 549 Investigation and behave himself for 120 days (from March 22nd), in all likelihood he will soon be comfortably reinsconced as the Debtors' sole officer (albeit minus his sold business). More importantly for him, he may also be in control of almost $100.0mn (even after accounting for reserves, see table below).
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