Developer Rishi Kapoor’s troubles are hitting close to home as he and his wife, Jennie Frank, could lose their waterfront Cocoplum estate to foreclosure.
On Friday, an entity managed by Coral Gables-based private lender Robert Gutlohn sued Kapoor, Frank and a Kapoor entity that owns the six-bedroom home on a half-acre lot at 7233 Los Pinos Boulevard in Coral Gables.
Frank and Kapoor, who stepped down in July as CEO of Location Ventures, the embattled development firm he founded in 2016, allegedly owe Gutlohn’s entity $4.6 million in principal and interest on a loan. In 2021, the couple took out the mortgage to finance their $5.9 million purchase, as well as for renovations to the house, according to the complaint, filed in Miami-Dade Circuit Court.
Kapoor and Frank defaulted on the loan by allegedly failing to make their monthly payment in August; not completing the renovations; and a “material adverse change” in Kapoor’s ability to personally guarantee repayment of the debt, the complaint states. Specifically, Kapoor is in a precarious financial position as a result of other lawsuits and investigations targeting him and Location Ventures, Gutlohn’s entity alleges.
Kapoor did not respond to a text message seeking comment. Jason Alderman, Gutlohn’s attorney, declined comment.
Other entities managed by Gutlohn have also filed separate foreclosure lawsuits in recent months against affiliates of Location Ventures that were previously developing a Coconut Grove spec mansion and two co-living projects in Coral Gables and Miami Beach. Those Gutlohn entities allege Coral Gables-based Location Ventures and its Urbin subsidiary defaulted on mortgage debt totaling $28.2 million, court records show.
Managers for Location Ventures and Urbin, which are in the midst of selling off all their assets to pay off creditors, declined comment.
The 6,000-square-foot Cocoplum house currently has a market value of $8.1 million, and features a main bedroom with private access to a lushly landscaped backyard and pool, a two-car garage and an 80-foot dock, according to a Zillow listing.
In March, Kapoor and Frank obtained a loan increase of $918,750 on top of the $4.5 million they originally obtained in 2021, the Gutlohn lawsuit states. Kapoor’s ability to repay the loan is hindered by the onslaught of scandals swirling around him, including investigations into his management of Location Ventures by the FBI and the Securities and Exchange Commission, the complaint alleges.
“Moreover, it is believed that R. Kapoor engaged in multiple frauds in connection with the project commonly known as Villa Valencia,” the lawsuit states. “Such fraud includes unaccounted for and dissipated loan proceeds, as well as [allegedly unpaid] employment tax remittance to the Internal Revenue Service exceeding $1 million.”
Last year, Location Ventures completed Villa Valencia, a 39-unit boutique condominium in Coral Gables. In a separate lawsuit filed this month, Juan Gronlier, whose company J & P Tiles was a Villa Valencia subcontractor, alleges he cut a deal with Kapoor to enter into a purchase agreement for a unit in the project that neither of them intended on finalizing. The tile company owner put down a deposit for $792,000 to make it appear he was buying a pre-construction condo so that Location Ventures could have enough customer deposits to obtain construction financing in 2020, Gronlier alleges.
Location Ventures subsequently sold the unit to another buyer, but the development firm never refunded him the $792,000, Gronlier alleges. Kapoor denied the accusations, previously telling The Real Deal that Gronlier had the option of converting his deposit into a minority stake in Villa Valencia.
The Gutlohn complaint also accuses Kapoor of making false representations that he had personal assets in excess of $2.5 million.
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