Former Arms Dealer Targeting Heartland Apartment Takeover Files For Bankruptcy
YSA Investments, an entity controlled by a former arms dealer and the inspiration for the 2016 film War Dogs, Efraim Diveroli, filed for Chapter 11 bankruptcy in Delaware in the middle of a multistate fight over control of a more than 25-property portfolio.
The bankruptcy claim effectively freezes litigation happening in Texas and other states while potentially offering Diveroli a path to taking over the properties from Oklahoma-based operator Vesta Capital.
Diveroli is moving to take control of the portfolio after Vesta founder and CEO Marc Kulick took loans from Diveroli at exorbitant rates before defaulting on the debt. In response, YSA filed deeds-in-lieu-of-foreclosure for Vesta’s assets and took over operations of its properties in Tulsa, Oklahoma, while a host of other creditors filed their own claims.
Fannie Mae has initiated foreclosure proceedings on eight properties, and an entity with two senior loans on Vesta assets has filed notice as an interested party in the Delaware bankruptcy case. The Chapter 11 filing from Miami-based YSA Investments says the firm has up to 200 creditors.
The web of legal complaints and potential takeover of Vesta’s assets stems from loans Kulick took from Diveroli in 2024 and 2025, the last of which included a 7,000% interest rate that compounds daily, according to data collected by banking intelligence platform Atriumdata.ai.
YSA claims in court filings that it is now owed $932M, and Diveroli’s firm has placed second mortgages on Vesta’s assets, claiming they were put up as collateral for the loans. Kulick argues he only backed the loans with his share of the business and not its assets, and he is suing in Texas to hold on to properties.
YSA also took over management and operations of Vesta’s properties in Tulsa on July 20 by sending new management teams to the properties with local police, according to court documents. YSA is directing tenants at those properties to pay rent through a payments portal on its website.
YSA and its attorney in the Delaware case didn’t respond to multiple requests for comment.
The bankruptcy filing triggers an automatic stay from all other litigation, freezing other legal cases involving it and Vesta around the country. Diveroli’s firm said in court documents that it intends to "restore the properties, then sell them to a long term local owner," but Kulick and Vesta Capital are fighting to claw back outright control of the assets.
There are at least 26 deeds-in-lieu-of-foreclosure that have been filed on Vesta assets, nine competing bankruptcy filings, $174M in senior Fannie Mae loans, and an ongoing investigation by the Oklahoma Securities Commission, according to Atriumdata.ai.
Kulick is also facing two lawsuits from former partners, including one filed under the Racketeer Influenced and Corrupt Organizations Act, commonly known as a RICO case, that allege he redirected millions in Vesta’s funds to himself, including to pay off gambling debts. Kulick’s former business partners are suing for damages and to force him out of the company.
Vesta’s properties are owned by individual entities, many of which have been pursuing their own Chapter 11 bankruptcy claims. Kulick told Bisnow this month that he intended to use the Texas case and bankruptcy courts around the country to force YSA out of any ownership dispute before dealing with the other foreclosures facing the portfolio.
YSA could use the bankruptcy filing to try to resolve much of the litigation with a debtor-in-possession financing package if the Delaware court approves the plan, which is likely to face its own challenges from creditors or Vesta. Kulick declined to comment on whether he or Vesta would take any action in the bankruptcy case.
YSA filed the Chapter 11 petition Tuesday, but supporting documents, like a complete list of creditors, haven’t been entered. The initial filing lists four creditors with a combined $867K in unsecured claims, all of which are for law firms and more than half of which come from Greenberg Traurig.
The filing indicates between $500M and $1B in both assets and liabilities, which likely reflects the value of the overall Vesta portfolio on one side and the $932M claim that YSA has against Kulick on the other.
