Nate Paul has put two more of his property companies into bankruptcy, including one of his most valuable development sites.
The federally indicted real estate investor behind World Class Holdings filed to put the entities that own 56 East Avenue and 501 Waller Street into bankruptcy, records show. The East Avenue site covers one of the last underdeveloped sites in the Rainey Street district, while the Waller Street property is a graffiti-covered warehouse in a gentrifying corner of East Austin with major redevelopment potential.
The East Avenue entity listed fewer than 50 creditors on its filing. It has assets worth between $50 million and $100 million, and liabilities between $10 million and $50 million, Paul claims. The Waller Street entity has the same range of creditors and liabilities, but only $10 million to $50 million worth of assets.
Both had previously entered bankruptcy before. Paul filed for the East Avenue property in 2019. That LLC exited reorganization in 2021. The Waller Street property, meanwhile, has neared foreclosure several times. The lender on both properties, Seattle-based Fairview Partners, noticed the Waller Street property for foreclosure in May 2021. Paul filed for bankruptcy that month, but the lender moved to dismiss the case, arguing it had been filed in bad faith. That was not the first time Paul was accused of using bankruptcy to avert foreclosure.
Fairview and Paul negotiated a deal where Paul could pay back the lender, and agreed to dismiss the case. However, the property was later noticed for foreclosure again in June and September 2023.
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Paul eventually cross-collateralized the $22.5 million loan to the East Avenue LLC and $11.2 million on the Waller one.
He may have bigger fish to fry than these two foreclosures. Last summer, Paul was indicted on eight counts of lying to financial institutions, charges that carried up to $180 million in damages and decades in prison. Before the end of the year, four more indictments were added on to the initial ones.
According to the charges, Fairview isn’t the first lender to spar with Paul at the East Avenue site. In December 2017, Paul sought a $15 million loan for 56 East Avenue, a prime parcel in Austin’s Rainey Street district, from an Irish investment fund called U.S. Real Estate Credit Holdings. But while doing so, he allegedly provided fraudulent bank account summaries to Calmwater Capital, a Los Angeles real estate firm that was advising the Irish fund on the deal.
Paul, who could not immediately be reached for comment, has denied the wire fraud allegations.