How Personal Guarantees are Sinking Sponsors

In better times, the personal guarantee was a mere formality — a signature on a piece of paper meant to show good faith, rarely expected to be enforced. But in 2025’s reality of underwater multifamily portfolios and stalled workouts, that fine print is now front and center.

For Tides Equities’ Sean Kia and Ryan Andrade, the punches keep on coming.

Over the past several weeks, the syndicators behind one of the Sun Belt’s fastest-growing apartment empires have been hit with a barrage of lawsuits seeking to enforce personal guarantees tied to failed deals. In just two new suits filed by Electra Capital, they’re being asked to cough up $40 million — on top of the $27 million judgment they already owe to Starwood Capital and a cascade of other claims from lenders like Acres Capital and Rialto. Add it all up, and the duo could be personally liable for over $120 million — a staggering number for any investor, especially when their portfolio is already in pieces.

The personal guarantee, once considered a last-ditch fallback for lenders, is becoming a weapon in the battle over distressed property. As Electra’s filings detail, Kia and Andrade didn’t just fail to perform — they allegedly left properties unfinished, racked up unpaid bills, allowed liens to pile up and ultimately defaulted on tens of millions in debt. Now, Electra’s trying to salvage what’s left, taking over management of the assets and hoping a Sun Belt recovery will eventually let them exit whole.

And Tides is far from alone.

Personal guarantees have become the great equalizer of this distressed cycle. Whether you’re syndicating C-class apartments or flying private, if you signed on the dotted line, you might now be the target.

Charles Cohen fought, and ultimately lost, a years-long battle over a $187 million judgment from Fortress, which says he tried to shield assets by transferring homes, yachts and cars to family and business entities. RFR’s Aby Rosen and Michael Fuchs are tangled in multiple suits involving personal recourse on New York assets. Last year, the Chetrit brothers faced an $84 million lawsuit from lender Richard Mack tied to the crumbling Hotel Carter. Rialto, Starwood and other lenders aren’t just foreclosing — they’re going after people, not just properties.

Alan Stalcup, the elusive operator behind GVA, is another example. He’s facing a potential $285 million liability after Benefit Street alleged fraud, forgery and a laundry list of “bad boy” acts on a 19-property portfolio. The lender claims Stalcup misappropriated insurance money, forged documents, let properties deteriorate and commingled tenant deposits.

Stalcup called the accusations “farcical,” but the sheer scale of the claims — combined with a previous $4 million fraud settlement — stunned the industry.

More than ever, personal guarantees are a lender’s go-to bargaining chip. But collecting is another matter. Borrowers can drag out discovery, hide assets offshore or simply plead poverty — sometimes from the deck of a yacht, no less.

Still, the message is clear: guarantees aren’t just for show anymore.

There was plenty of other news to catch up on this week. Josh Schuster was released on $2 million bail, Floyd Mayweather defended his close associate — and convicted felon — Jona Rechnitz, and State Farm was approved for a 17 percent rate hike in California amid an “insurance crisis.”

Josh Schuster released on $2M bail

Josh Schuster was released from a Florida jail on a $2 million bond as he awaits arraignment on criminal fraud charges in New York later this week. Schuster, the former head of New York-based Silverback Development, was arrested in Florida Wednesday on charges that he stole more than $10 million from investors in a Ponzi-like scheme between 2018 and 2022.

“I trust Jona”: Floyd Mayweather defends associate accused of theft by former business connections

Floyd Mayweather Jr. defended his business associate, convicted felon Jona Rechnitz, during The Real Deal’s NYC Forum, calling him a “key piece” of his real estate firm, Vada Properties. Rechnitz pleaded guilty to federal bribery charges in 2016 but hasn’t served prison time. Now, he’s facing a fresh wave of civil lawsuits alleging he stole millions in jewelry.

State Farm approved for 17% rate hike amid California “insurance crisis”

California regulators have approved a 17 percent emergency rate hike for State Farm homeowners as the insurer struggles to stabilize amid what officials are calling a “statewide insurance crisis.” The rate increase comes after the recent wildfires and coincides with a credit rating downgrade from S&P, which cited State Farm’s underperformance and shrinking capital.

“Gut punch”: Construction discovery delays Bulgari’s first U.S. hotel project in Miami Beach

An unforeseen construction defect will significantly delay the planned Bulgari hotel project in Miami Beach, potentially pushing back completion by almost a year. On Tuesday, the Miami Beach Historic Preservation Board approved modifications to the planned redevelopment of the Seagull Hotel that entails tearing down most of the historic 145-room building to put in a new foundation.

“Gross”: Tracy Tutor hits back at Leonard Steinberg on reality TV

Last week, Compass’ Leonard Steinberg and Eleonora Srugo, a luxury broker at Douglas Elliman and star of Netflix’s “Owning Manhattan”, took the stage at The Real Deal’s annual NYC Forum to debate the industry’s depiction on the small screen. And now, Compass broker and “Million Dollar Listing Los Angeles” star Tracy Tutor has entered the ring in the public match over the intersection of real estate and reality television.

Meyer Chetrit really wants Yoel Goldman arrested

Meyer Chetrit is fed up with Yoel Goldman’s failure to comply with court orders. Chetrit, who runs Chetrit Group with his brother Joseph, is once again asking a sheriff to arrest one-time Brooklyn big shot developer Goldman. Meyer Chetrit alleges Goldman has failed multiple times to comply with the Kings County court’s orders since a $8.5 million judgment was issued in Chetrit’s favor in 2021.

CA Ventures surrenders more property near potential Bears stadium

CA Ventures has surrendered yet another development site near the Chicago Bears’ potential new stadium after failing to secure construction financing. The firm gave up 3.5 acres of land in Rolling Meadows to First Bank Chicago via a deed in lieu of foreclosure.

Barbara Corcoran trades UES penthouse in a day

Barbara Corcoran’s Upper East Side penthouse flew off the market in just one day, fetching more than its $12 million asking price after a bidding war. The real estate mogul and “Shark Tank” star’s five-bedroom duplex at 1158 Fifth Avenue drew multiple bids shortly after hitting the market, according to Olshan Realty.