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Embattled Developer Rishi Kapoor Faces New Foreclosure Suit

Rishi Kapoor, who the Securities and Exchange Commission is suing for fraud, was named in a foreclosure suit at a Coral Gables property this week, the latest in a string of legal challenges the developer has been confronted with since the July collapse of his Location Ventures development firm.

The foreclosure suit related to a $10M loan for a planned 16-story condo project at 1505 Ponce De Leon Blvd. in Coral Gables.

The suit, filed by LDHC Holdings LLC, says a $10M loan issued in November 2022 and that matured a year later went unpaid over its entire term. The mortgage covered a mostly vacant site at 1505 Ponce De Leon Blvd. in Coral Gables, where Location Ventures had planned a 16-story condo project

Fort Lauderdale-based attorney Rob Hyman filed the lawsuit in Florida’s 11th Judicial Circuit for Miami-Dade County. Hyman is also listed as the manager for LDHC Holdings LLC in state business records.

The defendants are Kapoor, three firms with liens on the property and 1505 Ponce Partners LLC, the property’s legal owner. Kapoor had controlled the entity until October, when its authorized agents were changed to Vastal Shah of India-based developer MICL Group and Diana Ulis. Ulis and her husband, Alex Kleyner, invested in Location Ventures and have sued to recoup their capital. 

Location Ventures purchased the 1.6-acre site for $35.6M in December 2022, the South Florida Business Journal reported at the time. It was financed with a $20M first mortgage from Miami-based Vertix Group and a $10M loan from the Halpern Family Trust.

County records indicate that the first mortgage was assigned to a Halpern family entity in January, but it isn't part of the suit filed this week. The $10M debt was transferred to the LDHC Holdings entity in March, according to property intelligence platform Vizzda.

The Halpern Family Trust was led by Martin Halpern, a poet, playwright and professor at Brandeis University who died in September. The family trust had invested in at least two other Location Ventures projects that have also faced foreclosure.

In an email to Bisnow, Kapoor said he is no longer involved with the property because it was transferred to MICL, Ulis and Kleyner as part of the liquidation of Location Ventures’ assets, which is being led by former Judge Alan Fine. 

“I understand that the Halpern family, as a junior lender, has bought out the senior lender and is pursuing its rights against the MICL Group, Parag Mehta, and the Kleyner family, who bought out Location Ventures’ interests last year,” Kapoor said in an emailed statement. “I don’t have anything else to add.”

Mehta, who isn't named in the suit, is among the partners who worked with Kleyner and Ulis to acquire a 1.6-acre site at 551 Bayshore Drive in Fort Lauderdale that Location Ventures previously had under contract for $30M. 

When Bisnow reached her by phone, Ulis declined to comment. MICL and Hyman didn’t respond to emails seeking comment. 

Location Ventures folded in July following months of scrutiny that began when the Miami Herald published a report detailing allegations that Kapoor paid Miami Mayor Francis Suarez at least $170K in $10K-per-month installments as the development firm was seeking approval for projects in the city. 

The revelation led to investigations from the FBI and Securities and Exchange Commission, the latter of which charged Kapoor with seven violations of securities laws and won an injunction to freeze his assets in January. 

Kapoor’s $6M home in Coral Gables is also facing foreclosure, and the U.S. Marshals Service seized his 68-foot yacht in November.  

Eric Bustillo, director of the SEC’s Miami office, described Kapoor in a news release as “the architect of a multi-pronged real estate offering fraud that misappropriated millions from more than 50 investors.” 

Kapoor has countered that the charges are backed up by “unfounded, twisted and/or flat out false” allegations.

“Like others have unfortunately experienced in this current climate, we believe that this action is an overreach by the SEC,” he said in a January statement to Bisnow.