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Four men accused of fraud last summer by an Austin-based real estate holding company's CEO, who also filed suit in November, are now named defendants in a $35 million lawsuit over a foreclosure sale earlier this month.
Meandering Bend LLC filed suit in Travis County District Court on May 12 against Harris County attorney and foreclosure trustee Mike Riley, real estate professional Justin Bayne, Austin investor and well-known auto dealer Bryan Hardeman and his son Will Hardeman. The lawsuit includes more than a dozen counts over the real estate company's efforts to purchase a World Class Holdings property during a May 4 foreclosure sale.
Meandering Bend claims in its lawsuit that it was "the lawful highest bidder" for the property during a foreclosure auction at Travis County Courthouse and that Riley didn't acknowledge Meandering Bend's "winning bid" of more than $11.7 million.
"The facts in this matter are simple, yet defendants conspired and continue to conspire to complicate this matter and prevent plaintiff as the rightful, highest bidder from completing the transaction and acquiring the property," the lawsuit said.
Meandering Bend's complaint also names 4811 Soco as a defendant, which is a limited partnership headed by Bryan that held a lien on the property now at the center of the complaint.
World Class Holdings CEO Nate Paul is not mentioned in the lawsuit.
In September, Paul filed a criminal complaint with the Travis County District Attorney's Office alleging a fraudulent scheme by Hardeman, the other defendants now named in the Meandering Bend lawsuit and seven other men. In his criminal complaint, Paul alleged the group started committing "a fraudulent financial scheme to defraud mortgage borrowers" in January of last year and that it was still going on when he filed the complaint.
The scheme involved a series of individual loan purchases that "all shared very concerning characteristics" by an anonymous loan purchaser, the criminal complaint said.
"The loans were all at very low loan-to-value ratios and it became very clear the new 'anonymous lender' was moving in an aggressive manner to call loans in to default and pursue remedies," the criminal complaint said. "These remedies include trying to push for foreclosure on the commercial properties when such legal action was prohibited by orders of the City of Austin, Travis County and the State of Texas."
In November, Bryan, Bayne and Riley were accused in a lawsuit of having formed numerous shell companies to pursue a complex, fraudulent real estate scheme to defraud companies of equity in real estate in Austin, San Antonio and elsewhere in Texas. The three were accused in the lawsuit filed Nov. 23, 2020 in U.S. Bankruptcy Court Western Division of Texas of attempting to "spoil the market" for the real estate targeted in the alleged scheme to make it more difficult for the targeted companies to restructure their finances.
Bryan and his family worked through a company called "Anonymous Successor Lender" in an attempt to coerce banks to sell loans on properties owned by Paul without his knowledge, according to the lawsuit.