Restraining order sought against Hardeman-owned entity over allegations of refusal to accept payment

A group of Texas real estate lenders named as defendants earlier this month in a $35 million lawsuit over a foreclosure sale is facing similar lawsuits in Austin.

Nate Paul entity WC 707 Cesar Chavez LLC is seeking a temporary restraining order, temporary injunction and permanent injunction against Cesar Rainey Street LLC in the Travis County District Court. The allegations in an application for the restraining order states general counsel Mark Riley represents a group of lenders that are unlawfully refusing to accept payment for a loan they purchased in an attempt to call the loan into default and foreclose on the property.

Cesar Rainey Street LLC is owned by Bryan Hardeman and the Hardeman Family Joint Venture LTD.

"A borrower’s right to pay off its debt is a principle as centuries old as is the law," the document states. "Here, however, the lender refuses to accept the borrower’s money.... because this lender is not in business to get paid back on its loan and this lender wants to foreclose and take the property for itself, no matter what."

The lenders had scheduled the foreclosure sale on the property June 1, it states.

"In summary, despite knowing that borrower is willing and able to pay the lender in full, the lender inexplicably refuses to accept payment as is required by law and still intends to foreclose on the property," the document states. "The borrower, therefore, has no choice but to seek injunctive relief to stop the June 1 foreclosure sale, and to prevent the lender from exercising any other lien rights given tender of the indebtedness."

A similar lawsuit filed in Travis County also named Riley along with Austin investor Bryan Hardeman and his son Will Hardeman and real estate professional Justin Bayne, Houston Daily previously reported. Bayne is Riley's nephew and is allegedly manager of the the law firm behind these note purchases.

The lawsuit accuses the men of forming 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.

This is the fifth loan where this group of lenders has allegedly engaged in the same activity. All five properties are in Austin at 4811 S. Congress, Teakwood Plaza, Fourth and Rio Grande and the Alamo Industrial Center. These recent suits match the Cesar Chavez LLC criminal complaint to the Travis County district attorney.

"It is not only entirely improper and unlawful, but also bizarre, that the lender refuses what every lender wants: to get paid back the money it loaned," the application for temporary restraining order states. "But this lender is different. It and its principals and enablers’ motivation is not to collect on its indebtedness but to take real estate that is worth far in excess of the loan for itself. That conclusion is the only logical way to explain lender’s bizarre unwillingness to accept cash."

Paul is the CEO of World Class Holdings.