Tides Equities’ beleaguered principals face yet another suit from a short-changed lender, marking the fourth complaint to name the duo personally for alleged damages.
The Tampa-based debt fund Electra Capital sued Sean Kia and Ryan Andrade, claiming they triggered recourse guarantees on a pair of mezzanine loans backed by two Texas apartment complexes — the 208-unit Tides on Randol West in Fort Worth and the 188-unit Tides on Green Oaks in Arlington.
Recourse guarantees hold guarantors personally liable in the event of a default. Considering the other suits filed by Starwood Mortgage Capital, Acres Capital and Rialto Capital Advisors, the most recent complaint could put Kia and Andrade on the hook for a respective $32 million and $36 million.
Electra Capital’s CEO Sam Greenblatt, as well as Kia and Andrade did not respond to requests for comment.
The most recent complaint also points to a copycat effect, whereby creditors, eyeing other lenders’ lawsuits, scramble to file while the sponsor is still liquid.
As with so much of its portfolio, the sponsors defaulted on the debt, which totaled $8 million, and Electra foreclosed, the complaint alleges. The deals also carried $48 million in senior loans in addition to the mezzanine debt.
When Electra assumed ownership and regained its bearings, it found a disaster: “hundreds of thousands in outstanding accounts payable … in mechanics liens, judgments and lawsuits … and millions in uncompleted renovations and repairs Electra must complete,” the lawsuit reads.
Electra claims its loan terms required Kia and Andrade to address those issues and the pair had signed guaranties pledging that they would.
“But in abject breach of their contractual obligations, [the principals] failed to do so,” the suit claims.
The lender’s suit accuses Kia and Andrade of “gross negligence, mismanagement and self-dealing,” including the misappropriation of rents, among other claims.
Electra is seeking $6 million from Kia and Andrade personally for allegedly breaching guarantees, plus attorney’s fees.
On the heels of the complaints by Starwood, Acres and Rialto — all of which were filed over the past couple of months — observers questioned whether the personal liabilities of TIdes principals could be high enough to bankrupt them. The sponsors did not comment.
In a September appearance at The Real Deal’s LA Forum, Kia and Andrade colored their 2025 outlook in a swath of optimism and signaled the worst of the distress was in the rearview.
But just a few weeks into this year, suits tied to personal guarantees and foreclosure are piling up.
On January 10, The Real Deal reported that Benefit Street Partners retook Tides on Haverwood in Dallas with a $61 million credit bid after the sponsors defaulted on nearly $67 million in debt.
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