Eight months into Chapter 11 proceedings, F-Star Socorro, L.P. and 32 affiliated real-estate debtors are operating under a court-approved sale timeline for their El Paso commercial portfolio that requires a transaction to close by August 31, 2026, while retaining exclusive plan-filing rights through the same date and exclusive solicitation rights through November 2, 2026 Order Extending Exclusive PeriodsDkt. 843.
The 33 debtors—commercial real estate developers ultimately controlled by founder Gerald C. Ayoub from a Scottsdale, Arizona headquarters—filed voluntary petitions on November 4, 2025 Chapter 11 Voluntary PetitionDkt. 1. The filing was precipitated by the breakdown of the debtors' relationship with their largest lender, Madison Realty Capital, which holds a $585 million first-lien construction loan over the Arizona and Texas properties. According to the first-day declaration of Chief Restructuring Officer Lance Miller, Madison halted funding for the flagship Ritz-Carlton, Paradise Valley project in April 2025 and manufactured defaults in what the debtors characterize as a "loan to own" strategy—conduct that followed an El Paso state court injunction finding Madison had committed acts of manipulation and fraud in breach of good faith First Day Declaration of Lance MillerDkt. 19. Parallel insurance and tax disputes with Corebridge Financial over two El Paso loans—the $77 million Alameda facility and the $41.8 million Joe Battle facility—added further pressure.
Liquidity stabilization dominated the early case. The debtors sought postpetition financing and cash-collateral use on an emergency basis at the outset , and the court granted interim authority on November 7, 2025, with adequate protection for Madison and Corebridge . The financing has since been replaced and restructured through successor arrangements; the current controlling authority, a June 30, 2026 interim order, approved a term sheet with RC PV Lender I, LLC (identified in the record with Madison) authorizing an $8.5 million initial advance under a $20 million facility at 16% interest, maturing April 2027, with a second advance and final approval conditioned on further court action.
The case is now converging on a dual-track resolution: a court-supervised sale of the Texas properties and a plan of reorganization. On July 8, 2026, the debtors filed an emergency motion to establish bid procedures for the sale of their El Paso and Socorro industrial holdings, setting a qualified-bid deadline of August 17, an auction on August 20, and a sale hearing on August 24, with RC PV Lender I's $90 million credit bid establishing the floor Emergency Motion for Sale Bid ProceduresDkt. 842. A hearing on the bid-procedures motion is set for July 14, 2026, and a contested relief-from-stay hearing is scheduled for July 30. The Arizona Ritz-Carlton project—where hotel construction has been stalled since early 2025 even as 44 of 80 villas are sold and occupied—remains outside the current sale process and represents the principal unresolved asset for any plan.
