Austin investor Nate Paul sues lender to stop foreclosure on office complex

Paul claims he didn’t receive notice for UCC foreclosure sale, never missed a payment

Texas Austin /
Apr.April 12, 2022 06:32 PM

World Class Holdings’ Nate Paul (World Class, Google Maps, iStock)

Austin real estate investor Nate Paul, who recently sold a quarter of his holdings out of bankruptcy, is suing a mezzanine lender to stop foreclosure on an office complex in the Texas capital.

Entities tied to Paul’s firm, World Class Holdings, filed suit on April 12 in New York County Supreme Court against ATX Braker, a shell company that Los Angeles-based Karlin Real Estate owns. Paul’s firm is attempting to thwart a ​​Uniform Commercial Code foreclosure sale on a 13-building office campus in North Austin, called the Offices at Braker, and a nearby retail shopping center scheduled for April 14, claiming it wasn’t properly notified of the action.

The loans matured on March 9, and the suit states that Paul’s firm had not received notice of default and that it hadn’t missed a payment. World Class is now working to refinance the loans so that it can pay off ATX Braker, according to the court documents.

A spokesperson for Paul referred to a line in the lawsuit claiming that the lender
“seeks to acquire plaintiffs’ properties at an enormous discount rather than having its loan paid off in full.’’

The original amount of the firm’s mezzanine loan for the office park was $29 million, while there is also a mortgage loan with a balance of about $63 million, according to the court documents.

Paul is a powerful, yet embattled Austin real estate investor and developer who quickly amassed a multibillion-dollar real estate empire before the age of 30. His holdings have dwindled in recent years as he’s faced multiple foreclosures and bankruptcies, plus a raid by the FBI in 2019. Paul told The Real Deal last month that he’s planning to rebuild his empire after selling off the majority of his self-storage properties out of bankruptcy.

Representing Paul and World Class is Stephen Meister, a powerhouse attorney in New York real estate litigation. Meister has represented heavy hitters in Manhattan real estate such as Harry Macklowe, Donald Trump and Joseph Moinian. Meister and Thomas Friedman, also involved in the case, did not immediately return requests for comment.

Los Angeles-based Karlin is a real estate investment and development company with commercial projects across the U.S. and in the United Kingdom, according to its website. The firm’s Austin portfolio includes business parks such as Parmer Austin, where Apple Inc. is a tenant, and Parmer Riata.

Last year, Karlin also purchased out of foreclosure one of Paul’s marquee holdings — the 156-acre campus in Northwest Austin that was once occupied by 3M.

Karlin officials declined to comment.





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