Three StoryBuilt entities file for bankruptcy

As StoryBuilt works to untangle a web of debts through receivership, a former creditor has lost patience. 

Ever since the Austin-based developer went into receivership this summer, it has been working to salvage the value of its development portfolio. As part of the process, it struck several so-called Rule 11 deals with creditors, which delayed foreclosures to give the receiver time to get the company’s affairs in order. But one lender, Susser Bank, now claims StoryBuilt failed to meet the terms of their Rule 11 agreement and is using bankruptcy to further delay foreclosure. 

PSW Urban Homes LLC, which was used for StoryBuilt’s North Bluff and Frank communities in South Austin, filed for bankruptcy on Dec. 4. It has anywhere between 200 and 999 creditors, according to the filing. Its assets and liabilities are both between $10 million and $50 million. 

North Bluff comprises 88 single-family homes and 12 townhouses, according to the company’s website. It highlights StoryBuilt’s brand of urbanist-inflected suburban neighborhoods.

The ownership entity is also associated with Frank, a mixed-use project at 900 South First Street, and an unnamed, semi-constructed, 11-home project on Manchaca Road.

StoryBuilt failed to pay back one of the loans extended to the Manchaca Road project when it matured in May, according to a bankruptcy court filing by Susser Bank. StoryBuilt failed to respond to demands for repayment, and the bank eventually decided to sell the properties at foreclosure auction, Susser wrote. But on the morning of the scheduled foreclosure auction in July, StoryBuilt finally reached out and promised to pay back the loans, according to the filing. 

After the temporary delay, StoryBuilt still failed to repay the loan, Susser claims, and it again tried to get its money back through foreclosure sale. Instead of responding, StoryBuilt waited until the day before the scheduled auction and sent notice of its entering receivership to Susser, the bank claims. 

Susser and the receiver struck a Rule 11 deal to stave off a foreclosure, but the receiver failed to pay Susser back by Nov. 6 as stipulated by the agreement. The deal included a guarantee that StoryBuilt would not try to block a foreclosure effort by Susser if it failed to repay the bank by that date, including by entering bankruptcy. 

Nonetheless, Susser claims it was not repaid. It scheduled yet another foreclosure auction for the morning of Dec. 5. But on Dec. 4, StoryBuilt transferred the deed to almost all the properties on which Susser held a lien to the subsidiary LLC, and then put it into bankruptcy, Susser alleges. As of the filing, StoryBuilt owes $4.2 million on the note, Susser claims. 

Susser and StoryBuilt’s receiver, Los Angeles-based Stapleton Group, did not respond to requests for comment. 

At least two other StoryBuilt LLCs have filed for bankruptcy in December.  

SB-Downtown Plano has an estimated 200 to 999 creditors, according to its filing. Its assets and liabilities are pegged between $1 million and $10 million. The entity is tied to Ruby, a planned seven-home project at 1690 I Avenue in downtown Plano. 

The homes are not yet built, but the company broke ground on the project in late 2022, according to its website. Renderings of the houses show wide, wraparound porches and diverse designs across the project. 

SB Willa Commercial was the third StoryBuilt entity to file for bankruptcy in December. It had the same estimated creditors as the other two LLCs and between $1 million and $10 million of estimated assets and liabilities, according to the filing. 

The entity is associated with Willa, a mixed-use project at 1600 South 1st Street in Austin. The development has three floors of residences above office and retail on the ground floor. 

Earlier this month, StoryBuilt’s receiver reported that it had met with federal and state authorities including the FBI, the IRS and the Securities and Exchange Commission. The firm is looking to sell off its stakes in more than two dozen developments across four states.

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