Austin developer files for bankruptcy on 155-acre New Braunfels housing development

An Austin developer is filing for bankruptcy and restructuring its finances to keep things moving on a New Braunfels development.

On April 16, TBOTG Development Inc., the developer behind The Bluffs on the Guadalupe in Comal County, voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of Texas.

In 2021, William Korioth, president of TBOTG, told the Business Journal that initial plans for the 155-acre property called for development of 242 home lots, and 26 1-acre riverfront estate lots.

The developer issued a statement that it will use the bankruptcy process to "restructure its near- and long-term financial obligations and strengthen its capital structure for long-term sustainability."

Bankruptcy filings show TBOTG holds nearly $36 million in assets tied to this development and just shy of $23 million in liabilities. Bankruptcy documents also show the developer grossed $8.3 million in lot sales between the beginning of April through December of last year.

The developer also announced that it plans to resolve the legal disputes it has been mired in since 2022 "that have affected the speed and profitability of the development."

Lawsuits filed with the Supreme Court of Texas show that Korioth and partners from a previous venture argued over matters like financing and contractual obligations regarding the Bluffs development as well as the partnership's other ventures.

Kell Mercer, TBOTG's bankruptcy attorney, said the entity filed Chapter 11 to free up operational capital being made available by First Texas Bank for its vendors and suppliers, lenders, lot purchasers and investors.

He said the filing will also allow TBOTG to continue with developing the remaining lots on the property, numbering about 50.

"TBOTG expects to emerge quickly from the Chapter 11 process, stronger and revitalized in the development of the Bluffs," the developer said in a statement.

Mercer told the Business Journal that TBOTG filed for Chapter 11 with a financing commitment from its senior secured lender, Georgetown-based First Texas Bank.

"The financing is subject to bankruptcy court approval and, along with continued lot sales, will provide substantial liquidity to support operations in the normal course of business during the Chapter 11 process," the developer said in a statement. "With the support of the court-supervised process and the additional liquidity from the financing and continued lot sales, development of the Bluffs will continue in the normal course of business. TBOTG will honor all commitments to lot purchasers and vendors working on the development."