More bad news for the embattled real estate investor Ali Choudhri.
An LLC attached to a commercial property that was previously under Choudhri’s name has filed for bankruptcy, according to a Dec. 5 filing in the U.S. Bankruptcy Court for the Southern District of Texas.
The company, Galleria 2425 Owner, previously listed Choudhri as its sole member but now lists another LLC with the same address, according to the Texas Comptroller of Public Accounts. The address, 1001 West Loop South Suite 700, is the location of Choudhri’s commercial real estate firm Jetall Companies.
The bankruptcy filing estimates Galleria 2425 Owner’s assets between $10 million and $50 million, with liabilities estimated between $50 million and $100 million.
The LLC owns an 11-story Class B office at 2425 West Loop South in the Galleria with an assessed value of $29 million, according to the Harris County Appraisal District. Choudhri’s Jetall Companies’ website lists that building as one of its commercial holdings.
The bankruptcy came on the heels of a prolonged legal battle between the LLC and the property’s lender, the National Bank of Kuwait.
The LLC borrowed $52 million from the Kuwaiti bank, through its New York office, back in 2008. Earlier this year, the National Bank of Kuwait moved to foreclose on the office property but failed to complete a foreclosure sale.
Choudhri and Galleria 2425 Owner sued the bank in September, arguing that the bank has worked to disenfranchise the property for years. The lawsuit accuses the National Bank of Kuwait of interfering in Choudhri’s attempt to sell the property in January to investment firm Caldwell Soames, which would have cleared the LLC’s debt, the lawsuit claims. The National Bank of Kuwait’s attempt to foreclose on the building was designed to prevent the sale, the lawsuit alleges.
The 283,000-square-foot office building is the former headquarters of the now-defunct national department store operator Stage Stores. The office building lost 67 percent of its occupancy after Stage Stores folded in 2020. Choudhri’s lawsuit against the National Bank of Kuwait alleges the bank refused to approve new tenants, leading to problems meeting loan repayment deadlines. The lawsuit alleges that the bank wants to own the property.
Choudhri is also entangled in a federal lawsuit accusing him and nine others of fraud, bribery, racketeering and theft resulting in over $15 million in damages.
Austin-based construction lender Steadfast Funding alleges Choudhri and associates engaged in 17 scams to gain ownership of a five-story condo building at 829 Yale Street in the Heights.
Choudhri has denied the accusations, suggesting inaccuracies in audio recordings and transcripts provided by a whistleblower.
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