Austin News

A company owned by developer Nate Paul, who is at the center of multiple bankruptcies and foreclosure attempts, maintains in recently filed court documents that it has been trying to pay off at least one debt, but the lender is blocking its attempts.

"This is a simple case – borrower has performed its loan pay off obligations, but lender refuses to cooperate in accepting the loan payoff," lawyers for WC 4th and Rio Grande LLP wrote in the amended petition filed in the District Court of Travis County in December.

In a subsequent letter to attorneys for defendant La Zona Rio, the plaintiff's attorney said the lender is blocking the payoff by "attempting to rely on a litany of separate and distinct issues that have no impact on lender’s ability or obligation to provide to borrower an unconditional monetary amount due for borrower to payoff of the outstanding loan."

WC 4th and Rio Grande LLP says it owes just over $3.5 million while La Zona Rio wants more than $3.8 million, according to the letter.

"The only difference between the two statements is the addition of the lender’s own per diem, and a credit for the tenant rents collected by Lender," the letter states.

"Nonetheless, borrower escrowed the full amount of lender’s demand with Heritage Title since November 25, 2020. Accordingly, there is no basis for the statements in your letter or on the phone that the amounts in the proposed payoff are wrong. Borrower has deposited the full amount of your demand, and reserves the right to resolve issues related to the necessary credits for tenant rents."

In the amended petition, the plaintiff alleges "La Zona Rio ... is a recently formed, anonymous shell entity, with layers of nominee managers and lawyers, designed to surreptitiously protect, hide and shield the identities of their principals."

But the same filing in the Travis County court then states the principals are car dealership owner Bryan Hardeman, Will Hardeman and the Hardeman Family Joint Venture LTD.

This dispute is only one of many involving Paul, his principal vehicle, World Class Property, and related entities.

More than 20 businesses linked to Paul have filed for bankruptcy protection, which has enabled them to stop foreclosures, according to the Austin Business Journal. Lenders had moved to foreclose on properties linked to a combined $258 million in debt owed by entities controlled by Paul and World Class Property. 

Meanwhile, a tracking device allegedly was placed on the vehicle of an attorney overseeing the receivership of certain companies linked to Paul. In a court filing Monday, attorney Steve Lemmon wrote that he has no evidence on how the tracker came to be on his truck and did not know who placed it there, according to an Associated Press report.

But Lemmon said in a court filing Monday that "the surveillance clearly appears to be tied to" his work on the case linked to Paul and that trackers were also found by other "business adversaries" of the property developer.

Lemmon represents the court-appointed overseer of several of Paul's companies that are currently in bankruptcy. 

"I have absolutely no reason to believe that Mr. Paul would have anything to do with anything like that and would expect Mr. Lemmon to have sound proof before he makes that kind of inflammatory allegation," Paul's lawyer, Michael Wynne, told the Associated Press.

Paul is also linked to allegations that Texas Attorney General Ken Paxton intervened on his behalf in connection with his legal troubles. Former aides to Paxton have accused him of accepting bribes and misusing his public office in connection with his relationship with Paul, the SE Texas Record previously reported.

Among the allegations is that Paxton launched an investigation of law enforcement officials, including FBI agents, involved in a search of Paul’s house and business in 2019. No charges were ever filed against Paul, and both he and Paxton deny any wrongdoing.