Capital One sues S2 Capital's Everett over $11.5M guaranty

Capital One is suing Scott Everett over a personal guarantee tied to a defaulted loan. The bank says he owes $11.5 million. That figure comes from a guarantee cap of $10 million plus interest. The underlying financing matured in July. Capital One lent $85.2 million to buy and renovate Richmond Apartments in North Dallas. The loan closed in 2022. The complex has 531 units. S2 Capital owes $93.8 million against the loan, the bank says.

The case was filed Aug. 4 in New York Supreme Court, The Real Deal reported.

The suit arrives as S2 Capital's troubles come to a head. The firm has told investors in its REIT and its $400 million first fund that their money is gone. It also has $400 million in apartment foreclosures.

S2 was once near the top of the value-add multifamily market. It surpassed Blackstone as North Texas's most active multifamily buyer in 2022, according to The Real Deal. When rates spiked, the firm could not keep pace managing or upgrading its Sun Belt properties.

Everett tried to ride out the rate cycle with a structure. In early 2024 he launched what The Real Deal described as the largest private REIT. He folded about 30 deals into the vehicle to secure a credit facility that could refinance the pool. Rates outlasted the plan, and the trust's shares were marked below a dollar by late 2025. He is now raising $100 million for a continuation vehicle to preserve the properties that still work.

Everett joins a growing list of multifamily sponsors whose personal guarantees are being called. Starwood has secured more than $50 million in judgments against Tides Equities principals Sean Kia and Ryan Andrade. Acore and Vista Bank claim Lurin Capital's Jon Venetos is exposed to more than $80 million in guarantees. Starwood and Fannie Mae are pursuing GVA Management's Alan Stalcup over alleged "bad-boy" carve-outs.

The pattern suggests lenders are reading these documents aggressively. A cap on a personal guarantee was supposed to define the outer limit of a sponsor's exposure; the current suits show that caps themselves become the contested ground. For private credit desks, the practical point is that a guaranty is only as clean as the sponsor's other liabilities. For Everett, the fight is now over what the cap actually covers, not just whether the loan gets repaid.

The $100 million continuation vehicle will tell. If it fills, some creditors may prefer to wait rather than litigate. If not, the courts will keep setting the terms of the value-add unwind.