In the heart of Houston’s Inner Loop, a property dispute is unfolding over the former Xerox headquarters at 1001 West Loop South.
Jetall Companies owner Ali Choudhri and Canadian lender Romspen have been embroiled in a legal tug-of-war over Romspen’s attempt to foreclose on the eight-story, 255,000-square-foot Galleria office building, which is Jetall Companies’ headquarters. Choudhri-linked LLC Galleria Loop Note Holder, the owner of the building, failed to make payments on a $21 million loan provided by Romspen, leading to a default and causing the lender to push for a foreclosure sale. Choudhri’s entity filed an emergency temporary restraining order to stall the foreclosure sale of the property in June. Nearly a year later, the property remains in legal limbo.
A Choudhri-linked company, 1001 WL LLC, alleged that Romspen does not hold a claim to the property due to a slew of mistakes made during the initial foreclosure in 2019.
That LLC — which Choudhri owns, according to court documents — owned the property from 2017 to 2019. Another Choudri-linked company, Galleria Loop Note Holder, then bought the property via foreclosure sale in 2019.
The property in question was burdened with pre-existing liens totaling some $40.4 million, attached to it by MidFirst Bank. These liens were the result of the previous owner, who used the property as collateral for a loan from MidFirst.
Choudhri’s entity agreed to take on those liens when it acquired the property. The lawsuit alleges that the transfer of the property to Galleria Loop Note Holder was flawed due to errors in the deeds.
The lawsuit further contends that the deeds failed to specify the entity responsible for conducting the sale. All of these oversights, according to the legal complaint, invalidate the foreclosure sale altogether.
Choudhri’s core claim, then, is that since the foreclosure sale where he bought the property was not valid, then he never could have executed a deed of trust and assignment of rents to Romspen. That would eliminate any legal claim Romspen has on the property and invalidate its foreclose attempt. Romspen had provided the funds for Galleria Loop Note Holder’s acquisition of the foreclosed property.
The property was scheduled for foreclosure auction on Feb. 6. Choudhri’s ownership LLC filed for bankruptcy that same day. Choudhri did not immediately respond to requests for comment.
Now, the ownership LLC wants the court to confirm who really has a claim on the property’s debts. Until then, the future of the Galleria office and its looming foreclosure remain up in the air.
Choudhri is also facing a federal lawsuit alleging crimes ranging from fraud to bribery, with charges including racketeering and theft, which have led to alleged damages exceeding $15 million. Austin-based construction lender Steadfast Funding accused Choudhri and his associates of orchestrating 17 schemes aimed at acquiring ownership of a five-story condo building at 829 Yale Street in the Heights. Choudhri has denied those allegations.
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Houston
Ali Choudhri battles Romspen over foreclosure attempt on Galleria office
Commercial
Houston
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