Amid allegations of possible crimes in Texas Attorney General Ken Paxton’s office relating to beleaguered Austin investor Nate Paul, four more real estate entities controlled by Paul and his company, World Class Property, have filed for bankruptcy.
The Chapter 11 bankruptcies this week bring the total filings by Paul-controlled entities to 22 since last November, although two cases were dismissed last month by a bankruptcy judge because Paul lacked standing to file them.
Paul remains under federal investigation after his home and offices were searched by federal agents in August 2019.
One of Austin’s largest commercial landlords, Paul has for the past year customarily filed bankruptcies at the 11th hour to keep lenders from foreclosing on his various properties. His holdings include numerous high-profile downtown properties, as well as the 156-acre campus in far Northwest Austin that 3M formerly occupied.
The latest bankruptcy filings come as Paul emerges front and center in connection with a fight within the office of Texas Attorney General Ken Paxton, with dueling allegations at issue involving Paxton’s dealings with Paul.
The bankruptcies involve the following holdings: WC South Congress Square LLC, a group of three properties valued by the Travis Central Appraisal District at over $39 million combined. The three properties are the Congress Square Apartments at 500 S. Congress Ave.; the Congress Square business center at 510 S. Congress Ave., which houses Ego’s karaoke bar; and an office building at 105 W. Riverside Drive.
The other bankruptcies are for World Class entities that own a shopping center on Burnet Road; a tract on 4811 S. Congress Ave.; and a shopping center on Research Boulevard that was home to Cap City Comedy Club, which closed last month.
Those three properties are valued by the Travis Central Appraisal District at $9.3 million; $4.7 million; and $967,000, respectively.
The high-stakes dispute within the Attorney General’s Office involving Paul has emerged after seven high-ranking staff members, including Paxton’s first assistant who has resigned, said they have evidence of crimes allegedly committed by Paxton, including abuse of office, bribery and other possible wrongdoing.
Documents obtained by the American-Statesman show that Paxton’s office had been investigating claims Paul made that FBI agents raided his properties without proper search warrants, in possible violation of federal law.
Paxton issued a statement Saturday saying the seven employees have made “false claims” against him.
And in a statement Monday – and without naming any employees – Paxton said: “Despite the effort by rogue employees and their false allegations I will continue to seek justice in Texas and will not be resigning.”