Lawsuit Pauses Investor Takeover Of CA Ventures' Industrial Spinoff

Chicago-based developer CA Ventures is tacking on another case to its growing tally of courtroom battles, leaving a major transaction in limbo as former executives fight over who the troubled company needs to pay first. 

Nishant Bakaya, CA Ventures’ chief investment officer from 2017 through 2021, won a $5.8M judgment against the company earlier this year after filing a lawsuit in January alleging that his former employer missed installments on an exit agreement, The Real Deal reports.

Now, Michael Podboy, the former head of CA Ventures’ industrial development arm, Centris, has jumped into the fray, arguing the Bakaya judgment should be put on hold until he and other ex-Centris employees receive their own separation agreement payouts.

A ruling on Podboy's claim was still up in the air as of Friday. But the litigation has delayed a planned spinoff of Centris to Monarch Alternative Capital and Davidson Kempner in a deal that was supposed to close earlier this year, TRD reports. The industrial development platform was set for a rebranding as Outrigger Industrial until the court halted the transition due to the Bakaya suit. 

CA Ventures had aimed to give up its stake in Centris to reduce costs while it resolves other fiscal and legal issues. The new ownership group was to inject $350M to jump-start Centris, the developer behind the 1.3M SF Generation Park logistics development in Houston.

The latest scuffle for CA Ventures comes amid a pile of litigation, foreclosures and other troubles as the company struggles to surmount financial difficulty brought on by a market slowdown in new construction and sliding property values. 

CA Ventures didn't respond to a request for comment. 

The company's list of legal and financial troubles since March 1 includes:

• California-based lender ACORE foreclosed on Anthology of Tanglewood, a 230-unit senior living facility in Houston, after CA Ventures defaulted on its $72.1M loan.
• An investor sued CA Ventures, alleging it is owed the more than $10.5M it put into a West Sacramento multifamily project because the company failed to come up with its agreed-upon portion of the funding for the development.
• A lawyer defending the firm in a $3M dispute with investors asked a judge to withdraw from the case because CA Ventures hadn't paid him for the work.

In December, San Francisco-based publicly traded debt fund TPG Real Estate Finance Trust seized a CA Ventures-owned 263-unit Arlington Heights apartment complex it made an $80M loan on in 2021. 

QuadReal filed a lawsuit in September alleging CA Ventures CEO Tom Scott forced entities tied to the company to lease space in a River North office in which he had an ownership interest and later helped the office's landlord sue to evict his own firm.

And in August, individual investors sued CA Ventures for not paying back $10M in small-scale loans Scott personally guaranteed when accepting the deals in late 2021 and early 2022.