Starwood Capital has finally caught up to Tides Equities’ principals.
Sean Kia and Ryan Andrade must pay the lender a little over $27 million after defaulting on a pair of loans and triggering multiple personal guarantees, court documents show and The Promote first reported.
The decisions are a heavy blow for the partners, who’ve already lost countless assets to foreclosure in their years-long battle to save a bloated, bleeding portfolio.
Kia and Andrade’s personal financial situations are unclear; neither responded to requests for comment on how they planned to satisfy the Starwood judgments.
Back in December, however, industry observers speculated recourse obligations in the tens of millions of dollars would be enough to bankrupt most.
“It’s an enormous amount of money,” Zachary Streit, president of advisory firm Priority Capital Advisory said.
At the time, two lenders — Starwood and Acres Capital — sued the principals jointly for $58 million. Andrade also faced his own suit from Rialto Capital Advisors demanding $4.8 million on alleged breaches of guarantees tied to an Austin deal, Tides on Copper Creek.
Electra Capital added to the fire in January, suing both sponsors for $6 million and Acres, the same month, tacked on a second suit, alleging the principals owed more than $6.5 million on a Tempe, Arizona, property loan.
Those cases have yet to be decided, but the Starwood judgments don’t bode well.
The New York Supreme Court judge in the second decision against Kia and Andrade — $14.5 million owed on a Dallas deal — pointed to the first in Starwood’s favor as reason to rule against the pair.
“Simply put, there are no questions of fact about the Guarantors’ liability under the recourse Guaranty,” Judge Andrew Borrok wrote before citing the earlier decision on a Fort Worth debt that put them on the hook for $12.6 million.
A third case by Starwood, seeking nearly $24 million over a Phoenix asset’s allegedly breached guarantee, is still pending.
All told, the sponsors could be on the hook for $71 million, not counting attorney’s fees.
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