Loancore Sues for $32 Million Foreclosure of Converted Sears

Trouble continues for CA Ventures.

The embattled commercial real estate investment firm led by CEO Tom Scott and Chief Investment Officer John Diedrich is facing foreclosure on a Ravenswood apartment complex, and it defaulted on a $5 million promissory note, legal filings show.

Lender LoanCore filed a foreclosure lawsuit against CA Ventures after the firm allegedly failed to pay off a $32 million loan backed by a 59-unit apartment building at 1900 West Lawrence Avenue.

Problems became apparent earlier this year when MorningStar Credit reported payments on the loan were delinquent.

LoanCore is one of several creditors that doled out big chunks of debt to multifamily players ahead of interest rate hikes starting in 2022. Its loan to CA Ventures for the Ravenswood project — issued in 2021 — had a floating rate.

CA Ventures worked with Springbank to convert the building from one of the seven original Sears stores built in the 1920s into apartments. The project was said to cost $40 million — $678,000 per apartment — and opened in 2021.

In addition to the 1900 West Lawrence foreclosure, another lender last week filed a lawsuit against CA Ventures over unpaid debt.

Hopewell Partnership Investments issued a $5 million promissory note in 2019 to holding company CA Ventures Holdings.

Amid multiple amendments to the agreement, CA Ventures paid the debt down to $2.5 million before it stopped making payments, the lawsuit alleges. Representatives of Hopewell and CA Ventures communicated between March 2022 and June 2023 about a paydown schedule for the remaining $2.5 million balance.

CA Ventures’ Diedrich told representatives of Hopewell that the debt could be paid off “in a week or two.” The firm then repeatedly assured Hopewell that payments were coming that did not materialize, according to the lawsuit.

In June 2023, Diedrich allegedly said, “we’re on the verge of closing a significant transaction to clear all this up.”

CA Ventures has yet to pay any of that balance off, the lawsuit alleges. With interest, Hopewell attorneys claim the lender is owed $3.7 million.

The pressure from the lender comes on the heels of several other legal challenges facing the CA Ventures.

A group of investment firms sued in Cook County last month, alleging that Scott and Diedrich misrepresented how they intended to use investor funding in order to pay off debts they personally guaranteed.

The investors, led by a Chicago-based LLC called TCP GP Fund I Aggregator, claim they’ve lost the bulk of nearly $14 million they advanced to CA Ventures entities in 2021 and 2022. Scott has denied the allegations.