StoryBuilt receiver met with FBI, SEC 

Collapsed developer has been accused by its own receiver of misusing investor funds

Storybuilt Receiver Met With FBI, SEC
StoryBuilt's Anthony Siela (Illustration by The Real Deal with Getty)

Updated 2:14 PM, Dec. 8, 2023

When Austin-based developer StoryBuilt collapsed this summer, it left many wondering how the fast-growing builder had fallen so fast. It looks like government agencies are wondering the same thing. 

In a report detailing its recent activity, the Stapleton Group, which is now in charge of StoryBuilt’s estate, said it has been cooperating with authorities from an alphabet soup of agencies.

Stapleton met with five regulators in or shortly after October: The FBI, the Internal Revenue Service, the Texas Comptroller of Public Accounts, the Texas State Securities Board and the U.S. Securities and Exchange Commission. It is subject to multiple subpoenas and plans to cooperate with the authorities, anticipating “significant” costs to prepare. 

The receiver has alleged possible financial misdeeds by former StoryBuilt executives. The company may have misused investor funds, using money earmarked for specific developments on other expenses like corporate overhead or “extraneous initiatives,” according to the report.

After discovering the potential accounting errors, the receiver began a forensic analysis of StoryBuilt’s books. It has yet to complete that analysis or provide a price estimate for it — in fact, the receiver says the firm’s corporate structure was so confusing that it still doesn’t have an exact grip on StoryBuilt’s holdings. 

It “believes” that the estate holds an interest in 13 developments and 16 joint ventures. A majority of the projects have senior secured debt, Class A, B and C investors and revenue sharing agreement investors. As of Oct. 31, it had received 536 claim forms; in other words, there are a lot of creditors looking to be paid back.

From August to October, the receiver issued certificates promising repayment worth about $2.5 million. Some $1.58 million of those belong to the family associated with G.E.T. Marketing. G.E.T. is the firm that officially requested a receiver take over StoryBuilt’s assets earlier this year, and it is listed as the plaintiff in the receiver’s case in Travis County courts. But little is known about the firm, or why a marketing company came to hold such a significant amount of StoryBuilt Receiver’s Certificates. 

For reference, as of Oct. 31, StoryBuilt had about $712,000 in its bank accounts. 

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In October, the receiver hired Onyx Asset Advisors and A&G Realty Advisors to market all of Storybuilt’s assets. At the same time, Onyx lent the receivership $500,000 “on favorable terms” to support the business. So far, 1,095 parties have expressed interest in the portfolio, and 532 nondisclosure agreements have been returned to view more information about it. 

If the investment banking team can’t find one firm to buy everything, it will sell the portfolio off piece by piece.

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So far, the receivership has sold a handful of StoryBuilt properties. It sold a piece of its joint venture for a 123-unit project near 1907 Webberville Road in Austin. Lynd Development Group will join the project as the controlling member and developer, while StoryBuilt retains some membership interests. The receiver estimates the property will yield $102 million in sales.

It also sold Project Goose Run, at 9601 White Rock Trail in Dallas, returning about $3.8 million, according to the report. 

In October and November, the receiver struck 14 agreements with lenders to prevent foreclosures. 

StoryBuilt was developing 29 properties in four states when the receiver came on. It was dealing with hundreds of individual and small family office investors, as well as institutional sources of capital. The company had run out of funds to pay employees or keep up with debt service. Developments halted and foreclosures mounted. At the time the receiver took over, there were 25 foreclosures and lawsuits pending against the developer. 

“Creditors and investors in [StoryBuilt] were scrambling to raid any available asset,” the receiver wrote in the report.

CORRECTION: A previous version of this article incorrectly stated that G.E.T. Marketing owned a significant portion of StoryBuilt. Instead, it holds a considerable amount of StoryBuilt debt and Receiver’s Certificates. G.E.T. was not involved in the operations of the company.