CA Ventures creditors to Tom Scott: This time it’s personal

A quartet of CA Ventures’ lenders who are waiting on past-due debts owed by the Chicago-based multifamily giant now want CEO Tom Scott to open up his own wallet.

Scott and his development company last week were hit with the latest of several lawsuits that have been filed in Cook County court in recent months. The legal claims combine to paint a picture of a company scrambling for cash despite claiming a portfolio of assets valued at more than $15 billion.

The lawsuit filed late last week claims Scott signed a personal guarantee in June as part of the forbearance process, as a promise to repay the loans in the event of default by the affiliate of CA Ventures that had borrowed the money. The company previously told The Real Deal that it was working on a “large capital transaction” set for July that fell apart, and is now trying to line up a replacement financial vehicle to cover the costs mentioned in the legal disputes sparked this summer.

In May, the company’s landlord of its Chicago headquarters at 448 North LaSalle Street, Jaime “Jay” Javors, filed an eviction lawsuit claiming CA Ventures was late on more than $300,000 in rent for its more than 74,000-square-foot lease in his building. That suit was settled in June.

In July, though, Javors filed another eviction suit, claiming the company was late on rent again, and that case is still pending in court.

More lawsuits have followed, including one by four individual lenders named Linda and Robert Finkel of Chicago, Alan Grossberg and Houston-based Leon Brener. The individuals provided a total of $10 million in debt to CA Ventures affiliates in 2022, and allege they haven’t been repaid since the loans came due earlier this year. The lenders claim the lack of payment follows a forbearance agreement it reached with CA Ventures that extended its loan into July.

Scott and CA Ventures did not respond to requests for comment for this story.

The latest complaint by individual lenders has been filed against Scott and CA Ventures Holdings LLC, an entity overseen by the company’s CIO John Diedrich, according to court documents. They’re now coming after Scott’s personal assets for repayments totaling more than $12 million, including interest, fees and penalties. The four maintain they’re entitled to collect their money from the man who founded CA Ventures as a student housing company in 2004 and subsequently branched into multiple commercial real estate asset classes.

Attorneys for the individual lenders did not respond to requests for comment.

The status of CA Ventures negotiations for financing and its overall position is unclear.

The company and Scott are also in the midst of preparing to go to a trial set for November in a Delaware court case filed three years ago by former CA Ventures COO and one of Scott’s first hires at the company, JJ Smith. It alleges Smith was wrongly terminated after getting lowballed by Scott when Smith tried to cash out his equity share of the company with a sale to the CEO. It also claims that the firm’s valuations of its shares of private stock were unreliable.

Scott and CA Ventures affiliates being sued by Smith in that case have defended their termination of his employment and have tried to avoid sharing with Smith what it calls private information regarding settlements and separation agreements with other former employees.

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