The collapse of Austin-based developer StoryBuilt was one of the biggest downfalls of last year, but now, one of the company’s co-founders is pinning that collapse on its receiver.
StoryBuilt co-founder Ryan Diepenbrock is suing Stapleton Group, the firm running StoryBuilt’s receivership. Diepenbrock claims Stapleton thwarted his attempts to recapitalize StoryBuilt’s portfolio, mismanaged company assets and misrepresented its intentions to investors and leadership.
The suit marks the first public comments by any of StoryBuilt’s co-founders since the company fell into receivership last summer and Stapleton began selling off its portfolio. In that time, receiver Mike Bergthold has sold or lost to foreclosure many of its properties. He also sued Diepenbrock and two other former StoryBuilt executives, alleging they “severely mismanaged” the company and some of its joint ventures, “abdicating their duty of care and loyalty.”
As Diepenbrock tells it, Stapleton has placed its own interests above those of the shareholders, turning what was pitched as a short turnaround into a yearslong, lucrative process. Stapleton and Bergthold did not respond to requests for comment.
“The theme is consistent: Stapleton Group has maximized StoryBuilt’s ability to pay Stapleton Group at the expense of all others,” the lawsuit reads. “Rather than undertaking to rehabilitate StoryBuilt, Stapleton Group has been grossly negligent since its appointment as receiver, with its goal being to stay in power indefinitely and keep lining its pockets with millions of dollars of investors’ money.”
StoryBuilt first connected with Stapleton at the advice of its outside counsel, Diepenbrock’s attorneys write. Storybuilt was struggling financially, troubles Diepenbrock pins on factors that hurt many players in the market: dry financial markets and inflating construction and labor costs.
Stapleton Group has previously written in court filings that it initially expected to sell StoryBuilt’s portfolio in one piece for as much as $2 billion. Upon further examination, the receiver wrote, the portfolio was worth far less than it was led to believe, and it has since moved to sell off as many pieces as possible, while losing others to foreclosure. As it manages dozens of potential sales, as well as competing claims from investors and lenders, it will need years to collect all proceeds and distribute them properly, it has told the court.
In June 2023, Diepenbrock told StoryBuilt’s board that he was pursuing recapitalization options with Global Mutual Properties and Front Range Capital Partners. At the same time, he was considering financial consulting services from Stapleton and Harney Partners, the suit claims.
Diepenbrock and CEO Anthony Siela agreed to bring on Stapleton Group for the month of July to help raise capital and finalize the recapitalization deal. But once it was in the door, Diepenbrock alleges, Stapleton pushed him out in favor of a new executive committee.
The suit alleges that in July alone, Stapleton:
- Suggested voluntary receivership
- Proposed itself as receiver
- Sought out a creditor to bring a lawsuit requesting receivership against StoryBuilt
- Helped draft the lawsuit
- Drafted the order appointing itself as receiver
- Helped that creditor present the order to the court
Under the proposed recapitalization deal with Global Mutual, Diepenbrock would have set up a holding company with the new capital and run it in parallel in a series of joint ventures with StoryBuilt, the suit claims. He resigned from StoryBuilt in July in order to set up that parallel company, according to the suit.
As he was doing that, he continued to use his StoryBuilt email and company resources. However, soon after leaving, Deipenbrock’s email and IT access were cut off. He told Siela, who said he was “surprised” and restored them, the suit alleges. But Diepenbrock was cut off again, and Siela was ordered not to restore his access, he claims.
Diepenbrock also alleges that Stapleton intentionally hid the Global Mutual deal from investors.
”Stapleton Group was already counting its chickens with respect to the receivership fees it would generate for itself, and the recapitalization deal with Global Mutual threatened this revenue if it could bring StoryBuilt out of distress,” the suit claims.
As July turned to August, Stapleton Group was appointed receiver.
“This was the nail in the coffin for the recapitalization deal and parallel venture Diepenbrock had devoted hundreds of hours to,” the suit alleges. “It also meant the end of StoryBuilt.”
Once in charge, Stapleton mismanaged company assets while maximizing its own fees, Diepenbrock claims. He cites a meeting the receiver held with StoryBuilt investors about a month into the receivership. It budgeted $1.1 million in “professional expenses” over a 13-week span, more than 40 percent of the $2.5 million it asked investors to kick in, according to the suit.
He also argues that Stapleton stumbled into a foreclosure at an east Austin residential development called Charley, located at 1907 Webberville Road, costing investors millions of dollars.
Much of the receivership has focused on a forensic accounting of StoryBuilt’s books. The receiver’s reports have turned up startling allegations of mismanagement and moving investors’ money into different projects without proper accounting. Diepenbrock claims, however, that the review relied on cherry-picked figures that are “incorrect, misleading, and disproven by county property records of home sales.”
The suit is not the first time Stapleton has faced pushback over its receivership.
Last October, Partners Group claimed it was blindsided by a news release announcing the sale of 28 StoryBuilt properties, despite alleged assurances that it would receive advance notice and a chance to comment on marketing materials for the portfolio. Partners was StoryBuilt’s largest financial partner, party to joint ventures covering 17 StoryBuilt projects in Austin, Dallas, Denver and Seattle.
The receiver has reported cooperating with the following state and federal agencies: the Federal Bureau of Investigation, the Texas Comptroller of Public Accounts, the Texas State Securities Board, the Internal Revenue Service, the U.S. Securities and Exchange Commission, the US Department of Labor, the State of Washington Labor and Industries and the Texas Labor Board.
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