LURIN Lines Up $50M Fitzroy Grove Sale as Property-Level Chapter 11 Expands

The first sale in the chapter 11 of the LURIN multifamily platform now has a $50 million floor: the debtors have designated Weidner Real Estate Holdings LLC as stalking horse for substantially all assets of the entity that owns the Fitzroy Grove apartments in Rogers, Arkansas, ahead of a July 13 qualified-bid deadline and an August 17 sale hearing. That transaction is the opening move in what the debtors have framed as an asset-sale wind-down rather than a reorganization, and it is one property in a portfolio that LURIN managed at 33 multifamily communities when the filings began, each financed at the property level and now being resolved lender-by-lender.

The cases are a staggered, multi-entity chapter 11 of the value-add multifamily redevelopment platform founded by Jon P. Venetos. Property-owning debtor LLCs filed in five successive "Rounds" between March 2 and May 28, 2026 in the U.S. Bankruptcy Court for the Southern District of Texas (Houston Division), jointly administered under lead case 26-90344 before Hon. Alfredo R. Perez. The debtors did not seek debtor-in-possession financing; each operating property instead funds its case through consensual use of its lender's cash collateral, and Fannie Mae sits as the dominant secured creditor across the portfolio.

Debtor(s)	Lurin Real Estate Holdings XXI, LLC and affiliated debtors (jointly administered)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	26-90344
Petition Date	March 2, 2026 (lead case; later debtors filed through May 2026)
Judge	Hon. Alfredo R. Perez
Claims & Noticing Agent	Kroll Restructuring Administration LLC

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Staggered, Property-by-Property Filing Architecture

The LURIN cases are not a single consolidated bankruptcy but a sequence of property-level filings stacked under one jointly administered umbrella. Petitions arrived in five "Rounds" beginning March 2 and 5, 2026 — the Latitude, Aria, and Emory entities (Round 1) — followed by Fitzroy Grove, Villas del Tesoro, and 46 Eleven on March 20 and 30 (Round 2); the Lurin, LLC parent, Lurin Advisors, and several equity-partner entities plus The Morgan in early-to-mid April (Round 3); the Lorient and Palmiere debtors on April 21 (Round 4); and a final Round 5 on May 28. Each operating debtor holds, directly or through an equity entity, a single apartment community financed at the property level.

Joint administration under case 26-90344 is procedural only. The estates are not substantively consolidated, and the Tampa Bay portfolio filings underscore how cash collateral, adequate protection, and sale relief are negotiated separately for each property and each lender. Several of the property debtors are designated single-asset real estate cases, which subjects them to the accelerated stay-relief and plan-or-pay timelines that designation carries. The corporate stack places secured mortgage debt at the property level and material unsecured trade and intercompany debt at the holding-company level, beneath Lurin, LLC and its Class A members.

Value-Add Multifamily Model and Path to Distress

LURIN was founded in 2016 by Jon P. Venetos as a redevelopment firm that acquired underperforming multifamily assets and sought to lift performance through management, physical renovation, and capital restructuring. The platform managed 33 properties at the filings and runs an in-house manager, Lurin Property Management, LLC (d/b/a Steward + Helm), overseen by Lurin Advisors, LLC. The strategy depended on cheap leverage to fund acquisitions and renovations, and on refinancing or selling stabilized assets at higher valuations.

Rising interest rates compressed that model. Credit reports traced more than $710 million in defaulted multifamily loans across the broader portfolio, while a separate investigation counted more than $347 million in loans in litigation. The pressure surfaced in investor disputes as well: Select Securities Europe filed a $40 million default lawsuit against the Lurin platform in September 2025, months before the first petitions.

Receivership Cascade and Habitability Litigation

The chapter 11 filings were timed to halt a cascade of defaults and foreclosures and to substitute court-supervised sales for lender enforcement and receiverships. BDS V commenced a receivership action against The Morgan in Pinellas County, Florida on December 3, 2025, following debt-service defaults noticed in late 2025. Fannie Mae moved for a receiver over the Palmiere in Escambia County, Florida on February 5, 2026, and over the Lorient in the same county on April 16, 2026, both after default notices dated October 14, 2025. Judgment creditor Joshua J. Malone separately pursued a turnover action in Dallas County, Texas seeking a receiver over the Round 3 equity entities.

Distress also surfaced as habitability failures that drew municipal litigation. Water service at the Sutton Apartments in Madison, Alabama was shut off amid the owner's legal woes, with that property tied to a roughly $77 million Fannie Mae default. The City of Huntsville pressed a public-nuisance and demolition action over the vacant Serenity Apartments, moving to compel demolition of a complex that had sat vacant for roughly three years, and a court set a September 2026 trial on the nuisance claim. These disputes color the portfolio's condition but sit largely outside the core restructuring.

Property-Level Capital Structure and Fannie Mae's Liens

There is no consolidated funded-debt facility across the LURIN platform. Debt sits at each property under agency and bridge/CLO lenders, which is why relief is negotiated mortgage by mortgage. Fannie Mae holds first-position liens on multiple communities — including the 201 and 301 Wilcrest Drive collateral in Houston that secures the Latitude debtor — and is the secured lender on both the Lorient and the Palmiere, making it the most active secured creditor across the cases.

The non-agency lenders are property-specific. PFP VIII Sub III (CLO), LLC, a Prime Finance vehicle, holds valid, perfected liens on the Fitzroy Grove property, its rents, and its cash as of the petition date, as recorded in the final cash collateral order for that debtor. BDS V REIT financed The Morgan in a principal amount up to $46,324,000, and KeyBank National Association appears as a secured lender on at least one property. External reporting adds figures not yet confirmed in the indexed filings, including a $110 million loan from BDS IV Mortgage Capital on the Elements on Third complex in the Tampa–St. Petersburg market.

The later filings brought the first securitized lender into the cases. The Estates at Palm Bay debtor, which filed on June 3, 2026, is financed by U.S. Bank Trust Company, National Association, as trustee for the registered holders of BBCMS Mortgage Trust 2024-5C29, a CMBS securitization. The debtor acknowledges indebtedness of no less than $61 million — the loan's original stated principal — plus default interest, legal fees, and yield-maintenance premiums as of its petition date, the first confirmed CMBS-trust facility in a portfolio otherwise financed by agency and bridge/CLO debt.

Cash Collateral, Fannie Mae Objection, and the Foreclosure Carve-Back

With no DIP facility, each operating property runs on the consensual use of its lender's cash collateral under property-specific orders. The court entered a final cash collateral order for the Fitzroy Grove debtor on June 9, 2026 authorizing use of PFP VIII Sub III (CLO), LLC's cash collateral. Its terms cap spending at 110% of any approved budget line item, require weekly variance testing and weekly actual-versus-forecast reporting by category, carve out a $25,000 wind-down amount, and grant the lender replacement liens solely to the extent of any diminution in value of its prepetition collateral. A second interim order entered June 15, 2026 authorized the Palmiere and Lorient debtors to use Fannie Mae's cash collateral and treated each as a single-asset real estate case, and a third interim order followed for The Morgan on June 22, 2026. The Morgan's cash collateral use progressed to a fourth interim order entered July 2, 2026, authorizing use of BDS V's cash collateral under a Fourth Interim Budget running through July 7 on the same 110%-per-line-item cap and weekly variance-reporting terms as the other property orders; objections to a final order are due July 8, with a final hearing set for July 15, 2026.

The pattern extended to the securitized loan as the case grew. On June 26, 2026 the Estates at Palm Bay debtor filed an emergency motion to use U.S. Bank's cash collateral, offering replacement liens on the rents and profits of its property at 302 Blessinger Drive in Fort Walton Beach, Florida and a section 507(b) superpriority administrative-expense claim to the extent of any diminution in value, subject to a carve-out for U.S. Trustee and clerk fees. The court entered an agreed interim order on July 1, 2026 authorizing that use under the attached budget through 11:59 p.m. on July 22, 2026 unless extended, with adequate protection that also requires the debtor to perform its ground-lease obligations, provide financial reporting and rent rolls, allow audit and inspection access, name U.S. Bank as loss payee on insurance, and install a new property manager. A final cash collateral hearing is set for July 21, 2026.

Fannie Mae has been the most contentious counterparty. It objected to a Round 1 emergency motion to finance insurance premiums for the Latitude debtor, arguing that the proposed financing and its cancellation-and-default mechanics impaired its position as the multifamily mortgage lender; the Fannie Mae objection was ultimately resolved through agreed and revised orders. The agreed cash collateral arrangement for the Lorient and Palmiere debtors also preserves Fannie Mae's conditional ability to post those properties for foreclosure following an event of default, subject to notice and cure — a negotiated limit on the protection the automatic stay would otherwise provide.

A separate contest arose with a municipality. The City of Dallas sought a ruling that its state-court code-enforcement litigation against the 46 Eleven property at 4611 Samuell Boulevard fell within the section 362(b)(4) police-power exception to the automatic stay. The parties resolved it through a stipulation and agreed order signed June 19, 2026 that imposes a 30-day post-sale standstill on merits discovery, a tiered 15-to-60-day remediation schedule for code and fire-safety violations, monthly inspections beginning July 6, 2026, and resolution of monetary recoveries through the claims-allowance process, without any admission that the suit qualifies for the exception.

Fitzroy Grove Sale and Bidding Procedures

The first sale to reach approval is of substantially all assets of the Fitzroy Grove debtor, an apartment community at 2950 S. Fitzroy Place in Rogers, Arkansas. The court signed the bidding procedures order on June 19 and entered it June 22, 2026, approving bid protections, an auction-and-sale timeline, contract assumption-and-assignment procedures, and authority to designate a stalking horse bidder. The approved milestones run on Central Time: a July 13, 2026 qualified-bid deadline at 5:00 p.m., an August 3, 2026 auction at 10:00 a.m. if competing bids emerge, and an August 17, 2026 sale hearing at 10:00 a.m.

Bid protections for a designated stalking horse are capped at a break-up fee of up to 3% of the cash purchase price plus expense reimbursement of the lesser of $250,000 or 1% of the cash purchase price; outside those approved protections, no bidder is entitled to a break-up fee or expense reimbursement, and submitting a bid waives any such claim. The debtors initially set a June 22 deadline to designate a stalking horse, then filed a notice extending it.

On June 26, 2026 the debtors designated Weidner Real Estate Holdings LLC as the stalking horse under a real estate purchase agreement carrying a $50 million purchase price. The agreement fixes the approved-cap bid protections at a $1.5 million break-up fee — 3% of the purchase price — and expense reimbursement of up to $250,000, requires a $5 million earnest-money deposit within two business days of execution, and sets a $200,000 cure cap on assumed service contracts. Objections to the stalking-horse selection were due July 3, 2026 at 5:00 p.m. Central Time, and the $50 million agreement sets the floor the July 13 qualified-bid deadline and any August 3 auction must clear.

To market the property, the Fitzroy Grove debtor retained Cushman & Wakefield of Georgia, LLC on June 18, 2026 to solicit higher-or-better offers through the sale process. The broker's compensation is a $200,000 flat-fee commission subject to a final fee application, with a 180-day tail for sales to prospective purchasers it identifies and, in a credit-bid sale to the lender, payment first from the debtor's cash on hand with the lender covering any deficiency.

Other Round 1 properties are moving toward their own sale processes behind Fitzroy Grove. A July 1, 2026 notice pushed the stalking-horse designation deadline for substantially all assets of the Aria debtor (Lurin Real Estate Holdings XXVIII, LLC) and the Emory debtor (Lurin Real Estate Holdings XXXIII, LLC) from July 2 to July 9, 2026, and moved the deadline to object to any stalking-horse designation or bid protections from July 9 to July 16, 2026 at 5:00 p.m. Central Time.

No chapter 11 plan or disclosure statement had been filed across the cases as of early July 2026. On July 2, 2026, the Round 1, Round 2, and Round 3 debtors moved to extend their exclusive plan-filing period by 90 days to October 1, 2026 and their exclusive solicitation period to November 30, 2026, citing the size and complexity of the jointly administered cases, ongoing stakeholder negotiations, and pending sale processes including the noticed Fitzroy Grove stalking horse. The same day, the initial debtors moved to extend their section 365(d)(4) deadline to assume or reject unexpired nonresidential real-property leases to September 28, 2026, stating that the then-current deadlines varied by debtor from June 30 to August 12, 2026 and that more time was needed because sale processes remained incomplete and prospective buyers might seek assumption and assignment of specific leases. The cash collateral orders contemplate either a plan of reorganization or liquidation, but the operative path remains asset sales beginning with Fitzroy Grove.

Committee and Professional Retentions

An Official Committee of Unsecured Creditors is active in the cases, with its professionals retained effective May 7, 2026. The committee retained Pachulski Stang Ziehl & Jones LLP as counsel — a team including Robert J. Feinstein, Bradford J. Sandler, Steven W. Golden, and Theodore S. Heckel — at disclosed hourly rates of $1,150 to $2,695 for partners, $1,175 to $2,050 for of counsel, $725 to $1,350 for associates, and $625 to $695 for paraprofessionals. Province, LLC serves as the committee's financial advisor at rates of $900 to $1,600 for managing directors and partners, $700 to $1,050 for vice presidents and directors, $370 to $750 for analysts and associates, and $270 to $380 for paraprofessional and administrative staff.

On the debtor side, Porter Hedges LLP of Houston serves as counsel, with a team led by Joshua W. Wolfshohl, Aaron J. Power, M. Shane Johnson, Megan Young-John, and James A. Keefe guiding the Texas developer through chapter 11. The secured lenders are separately represented: Dentons for Fannie Mae, Polsinelli for PFP VIII Sub III (CLO), LLC and Prime Finance, and Thompson Hine LLP for KeyBank. Kroll Restructuring Administration LLC is the claims and noticing agent.

Key Timeline

Date	Event
2016	LURIN platform founded by Jon P. Venetos
Oct 14, 2025	Default notices issued on the Lorient and Palmiere (Fannie Mae) loans
Dec 3, 2025	BDS V commences receivership action against The Morgan (Pinellas County, FL)
Feb 5, 2026	Fannie Mae seeks a receiver for the Palmiere (Escambia County, FL)
Mar 2 & 5, 2026	Round 1 petitions — Latitude (XXI), Aria (XXVIII), Emory (XXXIII)
Mar 20 & 30, 2026	Round 2 petitions — Fitzroy Grove (LXV), Villas del Tesoro, 46 Eleven
Apr 8–14, 2026	Round 3 petitions — Lurin, LLC; Lurin Advisors; equity entities; The Morgan (LXIV)
Apr 16, 2026	Fannie Mae seeks a receiver for the Lorient (Escambia County, FL)
Apr 21, 2026	Round 4 petitions — Lorient and Palmiere debtors
May 7, 2026	Committee retentions effective (Pachulski Stang Ziehl & Jones; Province)
May 28, 2026	Round 5 petitions
Jun 3, 2026	Estates at Palm Bay petition (U.S. Bank / BBCMS 2024-5C29 CMBS collateral)
Jun 9, 2026	Final cash collateral order entered (Fitzroy Grove / PFP VIII Sub III)
Jun 15, 2026	Second interim cash collateral order (Palmiere/Lorient / Fannie Mae)
Jun 18, 2026	Cushman & Wakefield retained as Fitzroy Grove sale broker
Jun 19, 2026	City of Dallas stipulation and agreed order (46 Eleven stay dispute)
Jun 19–22, 2026	Bidding procedures order for the Fitzroy Grove sale signed and entered
Jun 22, 2026	Third interim cash collateral order (The Morgan)
Jun 26, 2026	Weidner Real Estate Holdings designated stalking horse ($50M); Estates at Palm Bay emergency cash collateral motion
Jul 1, 2026	Agreed interim cash collateral order entered for Estates at Palm Bay (U.S. Bank); Aria/Emory stalking-horse designation deadline extended to July 9
Jul 2, 2026	Fourth interim cash collateral order entered for The Morgan (BDS V); debtors move to extend exclusivity (to Oct. 1/Nov. 30) and the lease assumption/rejection deadline (to Sept. 28)
Jul 3, 2026	Stalking-horse objection deadline (Fitzroy Grove)
Jul 8, 2026	Objection deadline for The Morgan final cash collateral order
Jul 9, 2026	Extended stalking-horse designation deadline (Aria/Emory)
Jul 13, 2026	Qualified-bid deadline (Fitzroy Grove)
Jul 15, 2026	Final cash collateral hearing for The Morgan
Jul 16, 2026	Extended objection deadline for Aria/Emory stalking-horse designation
Jul 21, 2026	Final cash collateral hearing for Estates at Palm Bay
Jul 22, 2026	Estates at Palm Bay interim cash collateral authority terminates unless extended
Aug 3, 2026	Auction, if needed (Fitzroy Grove)
Aug 17, 2026	Sale hearing (Fitzroy Grove)
Sep 28, 2026	Requested extended deadline to assume or reject unexpired nonresidential real-property leases (initial debtors)
Oct 1, 2026	Requested extended exclusive plan-filing deadline (initial debtors)
Nov 30, 2026	Requested extended exclusive solicitation deadline (initial debtors)

Frequently Asked Questions

Who is the claims agent for the LURIN Real Estate Holdings cases?

Kroll Restructuring Administration LLC serves as the claims and noticing agent across the jointly administered cases under lead case 26-90344. Kroll maintains the consolidated case docket and claims register for the property-level debtors.

Why did LURIN file so many separate bankruptcy petitions?

Each apartment community is owned by its own debtor entity with property-level mortgage debt, so the platform filed in five successive Rounds between March 2 and May 28, 2026. The cases are jointly administered under one lead case for efficiency but are not substantively consolidated, and relief is negotiated separately for each property and lender.

Did LURIN obtain debtor-in-possession financing?

No. The debtors did not seek a DIP facility. Each operating property instead funds its case through consensual use of its secured lender's cash collateral under property-specific interim and final orders, including the June 9, 2026 final order for Fitzroy Grove.

What is the status of the Fitzroy Grove sale?

The court approved bidding procedures for substantially all assets of the Fitzroy Grove debtor in mid-June 2026, and on June 26 the debtors designated Weidner Real Estate Holdings LLC as stalking horse at a $50 million purchase price. A July 13 qualified-bid deadline, an August 3 auction if competing bids arise, and an August 17 sale hearing follow. It is the first of what the debtors describe as a series of property sales.

Has a chapter 11 plan been filed?

No chapter 11 plan or disclosure statement had been filed as of early July 2026. The debtors' stated path is court-supervised asset sales rather than a reorganization plan, and the initial debtors have moved to extend their exclusive plan-filing period to October 1, 2026 and their solicitation period to November 30, 2026, though the cash collateral orders contemplate either a plan of reorganization or liquidation.

LURIN's property-by-property posture echoes other real estate restructurings tracked by ElevenFlo. For comparison, see ElevenFlo's coverage of AGA Real Estate Security's chapter 11, Broadway Realty's $451.3M Summit sale, and Office Properties Income Trust's $2.42B restructuring.