A lawsuit filed in Texas state court accuses Alan Stalcup, a syndicator at GVA, of fraudulent financial practices. The suit claims that Stalcup, his wife Loren, and former vice president David Graham Bass engaged in a pattern of fraud by presenting bad debt as assets and bonds.
The plaintiffs allege that the defendants inflated rental income and profits by reclassifying bad debt, concessions, and operating expenses as assets and capital expenses. This practice allegedly made the properties appear more profitable than they were. According to the lawsuit: “In 2023 alone, the GVA Defendants falsely overstated the reported rental income across its entire portfolio by over $20.6 million, which in turn served to inflate values of the properties in its portfolio by hundreds of millions of dollars,” plaintiffs wrote in their petition.
Stalcup responded to these allegations by stating that the lawsuit is an “extortion attempt from a disgruntled investor” and indicated plans to countersue. Bass did not respond to requests for comment.
GVA became known for raising funds from investors to purchase underperforming apartment complexes. Investors would buy management interests in shell companies used for property acquisitions and pay management fees to GVA. The company’s strategy was effective when interest rates were low but faced challenges after rates increased.
The complaint details how internal financial documents showed instructions to move money out of concessions and delinquency categories. In one cited example, monthly net operating income for a property was reportedly increased by $133,558.
Plaintiffs include Hill Country Hillside, Ltd; River Retreat 1228 LLC; Hill Country Meridian LLC; and Sierra HC LLC. At least two are linked to Texas real estate investor Bryan Kastleman. They claim losses exceeding $15 million after investing in ten GVA-managed projects based on misleading information.
The lawsuit also alleges that Stalcup initiated capital calls under false pretenses after GVA struggled with rising debt obligations due to higher interest rates. Plaintiffs say funds raised through these calls were not used as promised but instead covered personal losses for the defendants. One instance notes about $3.4 million misappropriated to repay bridge loans held by GVA.
This case follows other legal actions against Stalcup and GVA this year. In February, lender Benefit Street Partners accused GVA of misusing insurance proceeds and mixing tenant security deposits with other funds—a violation that could trigger personal guarantees on a $346 million loan backed by 19 multifamily properties. Stalcup denied those claims as “farcical and utterly outrageous,” maintaining that loans had been repaid or remained current; litigation is ongoing.
Additionally, Starwood Capital Group filed lawsuits this summer alleging unpaid interest and accumulated liens on several properties managed by Stalcup’s firm—actions that may also activate personal recourse guarantees tied to those loans.
Further reporting has examined both Starwood’s pursuit of personal guarantees from Stalcup totaling $110 million (https://therealdeal.com/national/2024/07/22/starwood-goes-after-syndicator-alan-stalcup-for-110m-in-personal-guarantees/) and broader questions surrounding GVA’s acquisition strategy during fluctuating market conditions (https://therealdeal.com/national/2024/06/11/gvas-ill-timed-buying-spree-has-syndicator-on-shaky-ground/). Another article details allegations regarding Stalcup’s liability for $285 million connected with Benefit Street Partners (https://therealdeal.com/national/2024/04/16/syndicator-alan-stalcup-personally-liable-for-285m-benefit-street-alleges/).
