San Antonio-based Casey Development has filed for Chapter 11 bankruptcy protection as the company faces mounting debt totaling approximately $196 million. The filing, made on February 2 in the U.S. Bankruptcy Court for the Northern District of Texas, involves 31 affiliated entities that own various multifamily, retail, and other properties across Texas.
The move follows default acceleration notices from Randolph-Brooks Federal Credit Union and Fifth Third Bank on loans amounting to about $7.4 million and $44.6 million, respectively. Much of the debt is secured by assets in San Antonio and Austin, with personal guarantees from CEO Darren Casey.
Other major creditors named include Jefferson Bank, American National Insurance Company, and FirstBank Southwest.
During a court hearing last week, Garrick Smith of Munsch Hardt Kopf & Harr represented Casey Development before Judge Edward Morris. Smith said several factors led to the bankruptcy filing: “Obviously there’s been in Central and South Texas some lower effective rates and concessions that have had to be made, as the market has shifted,” he said. He also noted construction delays, increased costs, funding challenges, softening rents in the multifamily sector, and pressure on cash flow as contributing issues. Smith stated that the firm aims for a “global solution” to prevent piecemeal foreclosures or further loan accelerations.
The court approved consolidating all 31 entities into one proceeding—a step intended to simplify negotiations but which could increase tensions among lenders tied to stronger-performing assets.
Kenneth Ottaviano, representing Fifth Third Bank, objected to allowing Casey Development to use cash collateral for administrative expenses. Ottaviano argued this would unfairly shift resources from profitable properties supporting its loans to less stable ones: he warned it would amount to robbing “Peter to pay Paul.” Despite these objections, Judge Morris permitted using available funds for payrolls, taxes, and other obligations.
Douglas Brickley of Houston-based Stout Risius Ross has been appointed chief restructuring officer for Casey Development during this process.
Casey Development was founded in 1992 and has focused on projects within the Austin-San Antonio corridor. Since 2000 it has developed or acquired over three million square feet spanning industrial facilities as well as multifamily, office, retail and self-storage spaces.
