Lurin Capital Files For Chapter 11 Bankruptcy Protection

Jon Venetos’ struggling multifamily firm has entered bankruptcy reorganization.

Lurin Capital and related entity Lurin Advisors filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of Texas on Wednesday. The filing comes after the firm, founded by Venetos in 2016, separately sought bankruptcy protection for six multifamily properties in March.

It’s the latest chapter in the ongoing saga of the company’s downfall, which kicked off last spring when Acore Capital Mortgage accused the firm of defaulting on more than $400 million in loans tied to a dozen properties in Florida.

In the most recent bankruptcy filing, Dallas-based Lurin claimed to have less than 50 creditors, between $50 and $100 million in assets and between $10 million to $50 million in liabilities, according to the filing. Lurin Advisors claimed to have less than 50 creditors and between $10 million and $50 million in assets and liabilities, per the filing.

Mark Shapiro signed for both entities in his capacity as “chief restructuring officer.”

Both Lurin and Lurin Advisors claim in the filings to have an 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.

Like its peers in the space, Lurin peddled the value-add multifamily proposition, promising to buy up old apartment buildings, fix them up, raise the rents and sell them at a profit. But, Venetos had an edge: after spending the first half of his career at prestigious banks and hedge funds, he sought to professionalize multifamily investment with the skills acquired via a career in finance.

The firm’s portfolio peaked at 10,000 apartment units in 19 markets across five states, according to its website. It’s been shedding assets since last spring and started using bankruptcy as a tool to maintain control of what remains of its portfolio in March.

The latest filing comes after the firm sought bankruptcy protection for six other properties in March: Latitude 2976, at 201 and 301 Wilcrest Drive in Houston on March 2; the Emory Apartments, at 3205 East Olive Road in Pensacola, Florida, and the Aria Apartments, at 1861 Stella Lane in Fort Walton Beach, Florida on March 5; and Villas del Tesoro, at 7802 Villa Cliff Drive, and 46Eleven, at 4611 Samuell Boulevard, both in Dallas, on March 30.

The single-property bankruptcy cases were also filed in U.S. Bankruptcy Court for the Southern District of Texas.

Venetos’ firm has been fending off waves of distress for over a year, starting with Acore’s efforts to foreclose on Lurin-owned properties in April. 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.

Local municipalities, including cities in Florida, Texas and Alabama, have gotten involved when the conditions at Lurin-owned properties allegedly posed safety risks to renters. Tenants reported having no water service and enduring Texas summers without air conditioning.

Meanwhile, Venetos has fled Dallas to Aspen, where his family bought a 5,000-square-foot mansion on 7.6 acres for $18 million in 2022, deed records show. Morgan Stanley has since foreclosed on the property, according to a lawsuit filed in New York Supreme Court.