Angry investors and a condo community are taking legal action against StoryBuilt, shedding light on the Austin developer’s financial struggles amid a recent leadership shakeup.
Three lawsuits have been filed against StoryBuilt this year, seeking more than $1.5 million in monetary relief, plus non-monetary relief, the Austin Business Journal reported.
The lawsuits suggest that StoryBuilt, founded as PSW Real Estate, has been in hotter water than people realized. Less than two weeks ago, co-founder Anthony Siela disclosed the firm’s plans to furlough much of its staff after failing to capitalize on its large-scale growth goals.
Co-founder Ryan Diepenbrock stepped down from day-to-day duties, and Chad Shepler resigned from his role as COO and board director. StoryBuilt’s board is now being run by an oversight committee made up of shareholders, stakeholders and an independent director.
The first lawsuit this year, filed on Jan. 18 in Travis County, came from Eastline Condominium Community Inc., which manages the condo complex at 2002 East 7th Street in Austin. Eastline alleged that 28 units were found to have water damage as a result of StoryBuilt’s negligence. That lawsuit is seeking more than $1 million in damages, interest, attorney fees and court costs.
The complex was built in 2017, and residents first reported “water penetration” in 2001. Eastline claimed that the building’s weather-resistive barrier was thinner than mandated, among other construction failures.
Investor Capscar sued StoryBuilt on June 9 for breach of contract, fraud, breach of fiduciary duty and violations of the Texas Securities Act, the outlet said. Capscar is seeking just under $400,000 in damages, as well as accrued profits and interest on its original investment, access to StoryBuilt’s records and legal expenses.
Capstar alleged that StoryBuilt lured it to invest by offering preferred return and profit distributions that would be paid quarterly. After Capstar invested about $500,000 in 100 Class A units in May 2018, StoryBuilt held up its end of the bargain until the fourth quarter of 2019 and has since failed to pay what Capstar is owed, the lawsuit alleged.
Investor Joseph Thweatt, who owns class A shares in StoryBuilt, sued the company’s co-founders for breach of contract and fraud related to a March 2022 settlement. Thweatt is seeking residual payment plus accrued investment interest, profits from the defendants and attorney fees.
Thweatt made a $75,000 investment in 2018 when he bought 15 class A units. He tried to redeem his shares on several occasions, and StoryBuilt finally agreed in the fall of 2021. However, Thweatt allegedly hasn’t received the redemption payment he was owed, the outlet reported.
StoryBuilt has denied the allegations in all three cases.
—Quinn Donoghue
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