The attorney representing Nord Group and its entities across a slew of legal battles is moving to withdraw from all of their cases, citing his clients’ inability to pay him.
During a court hearing Friday, attorney Jason Kraus also said the defendants, seven Nord Group-related entities that own or owned apartment complexes across Houston, concede that they haven’t complied with a receivership order granted at lender Fannie Mae’s request in February.
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The withdrawal could leave the New York-based multifamily investment firm without a lawyer as Fannie Mae pushes for potential contempt sanctions and is set to auction Huntington Glen, one of Nord’s few remaining apartment complexes, on Nov. 3.
A Bisnow investigation in October detailed lender and investor accusations that Nord entities stole rents, provided fake insurance records and kept buildings in an “alarming state of neglect.” It also revealed recorded calls in which Nord Group CEO and co-founder Saqif Noor told an investor he signed for his father on loan documents and expected to spend time behind bars. Noor denied the conversations took place.
Noor didn’t respond to a request for comment for this story. Neither did Baruch Teitelbaum, a former Nord Group partner who previously told Bisnow that he is no longer involved with the company.
Kraus has filed motions to withdraw as counsel in the Harris County case and in a federal case in which Nord LLCs that own two properties in San Antonio are suing Freddie Mac. Teitelbaum signed both motions as an authorized signer for the entities. A motion to withdraw as counsel has also been filed in a Brazoria County case involving a Nord entity’s foreclosed apartment complex in Lake Jackson, Texas, according to the docket.
Steve Smith, the attorney representing Fannie Mae, said during Friday’s hearing that Teitelbaum appears to be leading the entities and refuses to turn over $100K of rental income that Nord entities collected after the receiver was appointed.
A hearing requiring the defendants and Teitelbaum to appear and show cause for their failure to comply with the receivership order is scheduled for Dec. 10, according to an order the judge signed Friday. The order warns that they may face sanctions, including penalties and confinement.
Nord Group and its subsidiaries have been party to more than two dozen lawsuits, bankruptcy cases and appeals since late 2023, with Kraus representing them in at least a dozen cases, according to Bisnow’s review of court dockets. In a statement to Bisnow for its October investigation, Kraus said Nord Group provides housing to thousands of working-class Americans and is proud of its role in the communities it serves.
“The Nord Group of companies vigorously denies all allegations and will continue to defend itself in court,” Kraus said in the statement.
On Friday, Kraus told Bisnow that he is withdrawing from all of the Nord entities’ cases, and he declined to elaborate on his clients’ inability to pay and the “other issues” he mentioned during the hearing.
In his Oct. 29 motion to withdraw from the Harris County case, Kraus advised the defendants to hire new counsel because limited liability companies can’t represent themselves in Texas courts.
Smith argued Friday that the motion to withdraw could be a litigation tactic to make the parties unreachable. A hearing on Kraus’ motion is set for Nov. 13.
Friday’s hearing came about because Texas’ 14th Court of Appeals granted Fannie Mae’s motion detailing the appellants’ ongoing noncompliance with the Harris County District Court’s receivership order.
The appeals court ordered the lower court to hold a hearing within 10 days and “grant all appropriate relief necessary to bring about compliance with the receivership order, including contempt of court.”
Harris County District Judge Cory Don Sepolio declined to take up specific arguments Friday and expressed frustration that the appeals court had ordered his court to hold a hearing on such a short timeline.
“They’ve lost their damn mind,” Sepolio said of the appeals court, adding that it is “absolutely unclear what the hell they want me to do.”
Smith said the appeals court’s 10-day deadline was a first for him.
Kraus argued that the court may not have the authority to order people who aren’t named parties to the lawsuit, such as Teitelbaum, to appear or be held in contempt. Sepolio said that decision would be made at the appropriate time.
Huntington Glen, a 346-unit apartment complex at 12023 Bissonnet St., is the only property of the five in Fannie Mae’s case that hasn’t been foreclosed on. Fannie Mae filed Oct. 12 to sell it at the Nov. 3 foreclosure auction, the fifth straight month it has posted the property for sale.
Fannie Mae originally sued Nord Group’s ownership entities in Harris County over five Houston properties in January, following alleged loan defaults. The next month, a judge agreed to appoint a receiver to manage the apartments during the litigation.
During the takeover in February, the receiver reported that the previous owners didn’t comply, remotely locking computers, telling staff to leave, and not turning over rent rolls or financial information. The receiver also alleged that two people, including a Nord Management employee, assaulted takeover staff while stealing a grill and propane tank from an apartment office.
The defendants filed an interlocutory appeal of the receivership in Texas’ 14th Court of Appeals within a day of the order being granted. The appeals court denied the appellants’ emergency motion to temporarily stay the receivership order on Friday, Feb. 27.
By the following Wednesday, one of the Nord entities in the case, Huntington Glen SWNG TIC 1 LLC, had filed for bankruptcy, putting the appeals court case on hold.
Huntington Glen has filed for bankruptcy in Delaware, New York and Texas, according to Bisnow’s review of federal court records. Its most recent bankruptcy case was dismissed in May, and the entity was barred from refiling for 180 days, according to the filing in the U.S. Bankruptcy Court for the Southern District of Texas.
The appeals case was reinstated in September.
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