A Colorado investor is seeking answers and attempting to recover at least $1.3 million in investments he made in 2008 with Austin entrepreneur Nate Paul and his troubled real estate empire through a lawsuit filed Monday in Dallas County.
The lawsuit, filed by Boulder, Colorado, resident Nicholas Wilder and the Wilder Family Trust, alleges Paul enticed Wilder to purchase securities for equity investments in various Texas real estate entities owned by Paul’s company, World Class Capital Group, based on “unsubstantiated representations” that turned out to be false.
Moreover, the lawsuit says, Paul and his companies have failed to provide Wilder with any substantive information about his investments and that they squandered the investment money to “almost nothing,” instead leaving Wilder with a $25,478 tax bill from the State of North Carolina.
The lawsuit comes weeks after a number World Class properties were auctioned off at foreclosure sales in Travis County; months after Texas Attorney General Ken Paxton was reported to federal authorities by his own employees regarding his alleged shady, inappropriate and downright illegal dealings with Paul, a Paxton donor; and nearly two years after the FBI raided Paul’s Austin home and World Class’ headquarters.
Among many claims, Wilder’s lawsuit seeks a temporary restraining order from Dallas District Judge Eric Moyé that would enjoin the defendants from engaging in a number of activities that would essentially freeze the assets and prevent them from going out of state or offshore.
“As we sit here today, we don’t know what’s going on with the investments, and [Paul is] not providing information to investors,” Dallas attorney Jason Friedman, who represents Wilder, told The Texas Lawbook. “He’s not running his business how a legitimate business should be run. We want to freeze the assets because … we’re trying to figure out where the assets are and recover them.”
World Class and Paul did not respond to requests for comment.
According to the lawsuit, Wilder invested in four separate World Class entities that were formed to acquire property in Dallas, Houston, San Antonio and North Carolina and involved the 717 Harwood skyscraper in downtown Dallas, a medical office building in Houston and a shopping center in North Carolina.
In the instance of the San Antonio real estate, which included two commercial properties off Lanark Drive, Wilder later learned that it was sold without him receiving any proceeds from the sale or a K-1 form.
Beyond the TRO, Wilder seeks “actual, consequential and punitive damages” as well as attorneys’ fees from the defendants on several legal claims, including securities fraud, violation of the Texas Deceptive Trade Practices Act, common law fraud, breach of fiduciary duty, negligent misrepresentation and breach of contract. The lawsuit also seeks the appointment of a receiver over the San Antonio property and its proceeds as well as an auditor over the defendants’ accounting to determine how much Wilder is entitled to.