Lawsuits Advance Against CA Ventures With $24 Million Claims

Tom Scott is feeling more pressure.

He and his struggling Chicago-based development firm CA Ventures were hit with more legal and financial setbacks this month as lawsuits involving them pile up in Cook County court.

The latest litigation entails an allegation by Uruguay-based Peninsula Investments Group, which claimed in a complaint filed this week that CA Ventures’ senior housing arm is late paying off over $10 million in debt that Scott took on. The suit was filed in the days following a judge’s decision to deny Scott’s motion to dismiss a complaint alleging that he used nearly $14 million in fundraising led by the heir of Treasure Island, the longtime Chicago grocery chain that shuttered in 2018.

The developer’s fight with Peninsula is similar to others against him and his firm that, together, paint a picture of CA Ventures’ desperate fundraising efforts amid the early stages of the commercial real estate downturn brought on by the pandemic and the interest rate hikes of 2022.

Since a series of lawsuits and real estate losses started accumulating against CA Ventures in 2023 — including an eviction case at its River North headquarters into which it never moved its offices — Scott has repeatedly cited the hit that senior housing assets have taken since the health crisis. It decimated demand, a reason his firm has come under scrutiny from counterparties and their attorneys, he has said.

Specifically, Peninsula claims that $8.1 million that it loaned CA Senior Living in 2021 has gone bad. While CA Ventures agreed to make monthly interest payments using revenues from its construction projects and other contracts, more than $10 million is owed, including the entire principal, plus interest and fees, the suit says.

CA Senior Living agreed to make monthly interest payments on the debt, and later, in order to amend the loan, agreed to assign proceeds from 41 construction projects to servicing the debt, including money from recapitalizing, selling or refinancing the properties. Still, the CA entities put on the hook for the debt defaulted on its repayment, the suit says.

Peninsula’s complaint, filed Tuesday, compounds the legal risk the embattled development firm and its CEO face from disputes in the hands of Chicago judges.

Earlier this month, a Cook County judge denied Scott’s motion to dismiss claims brought by an affiliate of the Treasure Island heir, Christ Kamberos Jr., and his firm Tierra Capital Partners. The Tierra entity claims it invested nearly $14 million in development projects proposed by CA Ventures businesses but received no return.

Tierra alleges that Scott and his firm’s Chief Investment Officer John Diedrich used the money to pay off debts they had personally guaranteed to deescalate the risk they faced as individuals, amid their company’s legal and financial trouble sparked by the commercial real estate downturn.

“We are just beginning discovery, and we are confident that we will be able to establish the facts necessary to get the case thrown out at summary judgment before even getting to trial,” said David Rammelt, an attorney for Scott and his firm. “We vehemently deny the plaintiff’s allegations, and we intend to show that there was no fraud here.”

Peninsula’s attorney declined to comment, and Scott echoed his lawyer’s statement in saying he was confident that the Kamberos entity’s suit would soon be tossed out of court.

Kamberos’ attorney said it’s significant that Judge Anthony Swanagan ruled against Scott’s attempt to have the $14 million fraud suit dismissed. Earlier this summer, CA Ventures won a ruling to have a different investor’s lawsuit tossed out of court after he complained of being wiped out of investments in land near the potential new stadium site for the Chicago Bears in Arlington Heights, where development plans by Scott’s firm didn’t come to fruition as the investor had hoped.

“Defendants’ attempts to avoid their obligations and skirt responsibility for their actions has been repeatedly rejected by the court in this case,” Tierra’s lawyer Michael Layden said. “The denial of defendants’ motion to dismiss is further affirmation that TCP has not only brought strong contractual claims against the CA corporate defendants, but also actionable fraud claims against their principals, Tom Scott and John Diedrich.”