T
ides Equities' co-founders Sean Kia and Ryan Andrade are facing a new threat: being held personally liable for tens of millions of dollars. Three lenders - Starwood Mortgage Capital, Acres Capital, and Rialto Capital Advisors - have filed lawsuits against the principals, alleging they breached guarantees on various loans.

    The suits claim Kia and Andrade failed to meet commitments to finish renovations and pay interest, triggering recourse obligations that allow lenders to pursue them personally for debts totaling over $50 million. The principals are allegedly on the hook for at least $26 million (Kia) and over $30 million (Andrade).

    Real estate attorney Zachary Streit notes that this level of obligation can bankrupt most people. While bankruptcy isn't certain, the fact that lenders have taken back Tides properties in credit bids suggests negotiations had hit a wall.

    The flurry of filings in one month indicates lenders have little confidence in Kia and Andrade's ability to cover the alleged debts. "It's a snowball effect," Streit said. "Lenders are filing early, hoping there's something left to collect."

    Tides Equities has been struggling with distress for over a year and a half, with $905 million of its debt watchlisted due to revenue not covering mortgage payments. The company has already faced foreclosure on several properties and lost some.

    It remains unclear if Kia and Andrade have the liquidity to cover their alleged debts. However, it's possible that other lenders could follow suit, filing lawsuits in an attempt to recoup deficiencies.