Lurin Capital Files For Chapter 11 Bankruptcy Protection

Jon Venetos’ Lurin Capital is trying to preserve control of what remains of its crumbling portfolio, using bankruptcy filings as a strategy.

The Dallas-based firm filed two additional Chapter 11 cases on Thursday, after filing one earlier last week. The entities named in the Thursday filings are connected to distressed apartment properties in Florida.

Lurin initiated bankruptcy proceedings for the Emory Apartments, at 3205 East Olive Road in Pensacola, and the Aria Apartments, at 1861 Stella Lane in Fort Walton Beach, three days after filing for Chapter 11 protection for Latitude 2976, at 201 and 301 Wilcrest Drive in Houston.

The three cases were filed in U.S. Bankruptcy Court for the Southern District of Texas.

In the cases filed Thursday, Lurin claimed to have 50 to 99 creditors and $10 million to $50 million each in estimated assets and liabilities, according to the bankruptcy filings. Mark Shapiro signed for Lurin Capital on both filings in his capacity as “chief restructuring officer.”

The firm listed its office at Rosewood Court, an Uptown Dallas office building at 2101 Cedar Springs. Landlord Rosewood Property Company claimed in a Dec. 11 lawsuit that Lurin bailed on its lease last fall. It also alleged Venetos personally guaranteed the lease and owes the landlord $5.3 million.

Both the Emory and the Aria are in receivership, after lender Keybank sued Lurin Capital to foreclose on the properties in December. Keybank claims Lurin defaulted on the $25.6 million loan tied to the Emory and the $17.5 million loan tied to the Aria.

The bankruptcy filing automatically pauses the foreclosure process.

The filings are the latest development in the story of Lurin’s collapse, which began in April with Acore Capital Mortgage’s suit against the firm, claiming Lurin defaulted on nearly $400 million in loans tied to 12 properties in Florida. Since then, Fannie Mae sued Venetos and Lurin over the alleged $77.2 million default of the loan tied to Latitude 2976. Vista Bank and Keybank also filed lawsuits claiming defaults. In a series of October lawsuits, Acore claimed that Venetos personally guaranteed the money he borrowed from the lender and still owes $81 million.

The lawsuits by Keybank and Vista include claims of fraud. Keybank alleged Venetos transferred $24,570 from his accounts with the bank to a personal account. Vista accused him of falsifying account statements from the lender in an attempt to take out loans elsewhere. Former employees have also come out to accuse Lurin of lying on loan reimbursement requests to lenders by inflating costs of repairs and submitting invoices for work that wasn’t done.

Venetos’ firm has also been sued by the city of Plano, north of Dallas, and the city of Huntsville, Alabama over conditions at Lurin-owned properties.