In an October 21, 2026 investor update, Crew Management reported that The Walk entities had consented to the appointment of Farbman Group as receiver. Management expected the appointment on October 22, subject to entry of a court order, and described plans to cooperate with lender BankPlus on a transition and sale process.

The update presents a troubling picture: occupancy of just 57.37%, disrupted rent collections, remediation expenses, a municipal tax enforcement action, and unsuccessful efforts to secure a replacement sponsor or additional financing. Management expressly warns that investors could lose some or all of their invested capital.

These developments form part of Iorio Law’s broader Versity Investments and Crew Enterprises DST sales investigation, which examines sponsor misconduct allegations and whether selling broker-dealers adequately investigated these investments and disclosed material risks.

What Crew Reported About The Walk

According to the investor update, moisture and mold conditions previously resulted in City occupancy restrictions affecting apartments and disrupted scheduled move-ins. Management says remediation work has been completed across the affected apartments, with testing and cleaning performed. Most affected units have been cleared for occupancy, although a limited number still require final City administrative clearance.

Those improvements have not resolved the property’s financial problems. Crew reports that reduced collections, tax obligations, insurance costs, and remediation expenses have left revenues insufficient to meet ongoing needs.

The update also describes disputes over residents’ lease obligations. Book & Ladder disputes certain residents’ assertions that their leases automatically terminated and is pursuing recovery on an individual basis. Those are management’s positions; the letter does not establish the outcome of the lease disputes or how much money will ultimately be collected.

A Replacement Sponsor and Additional Financing Did Not Materialize

Crew previously pursued a transition to an independent sponsor, including a replacement trustee and management team. According to the October 21 update, that transition no longer appears viable.

Management also evaluated funding and restructuring alternatives with outside advisers, but the financing needed to implement them did not become available. Its focus has shifted to selling the property.

For investors, this represents a significant change in the proposed path forward. Efforts to preserve continued ownership have given way to an anticipated receivership and sale, with recovery dependent on the property’s remaining value after debt, other obligations, and process costs.

Tuscaloosa Tax Enforcement Preceded the Receivership Effort

The update identifies the City of Tuscaloosa’s business license tax as another source of financial pressure.

Crew states that management challenged the tax with assistance from a third party and withheld payments while pursuing that challenge. The City subsequently filed an enforcement action seeking unpaid business license taxes and an injunction against property operations.

According to Crew, BankPlus became actively involved after that action and later pursued appointment of a receiver. The Walk entities have now consented to Farbman Group’s appointment.

The letter describes the Alabama proceeding as separate from a Delaware petition discussed in an earlier investor notice. It also reports that a Delaware hearing previously scheduled for November 5, 2026, was taken off calendar. The update does not state that the Delaware petition has been dismissed or finally resolved.

A Potential Sale Does Not Establish Investor Recovery

Crew reports that buyer outreach has produced a written offer and additional expressions of interest. The update does not disclose the offer price or establish that a binding sale agreement has been executed.

A written offer alone does not show whether a sale will close or whether proceeds will be sufficient to return any investor capital. Crew acknowledges that recovery will depend on the ultimate sale price, outstanding debt and other obligations, and the costs of the process.

The October 21 letter also does not confirm entry of the receivership order. Until that order is available, the anticipated appointment should not be described as a completed court action.

Following Hayworth Tanglewood DST

The Walk’s anticipated receivership follows the appointment of a receiver for Hayworth Tanglewood’s Houston property on August 31, 2026. Iorio Law’s Hayworth Tanglewood DST foreclosure and receivership update discusses that proceeding and its implications for investors.

The developments involve separate properties and proceedings. Each investment requires its own review of offering documents, financial records, management decisions, and sales practices.

Iorio Law is also monitoring Vintage DST, One on 4th DST, and Apex South Creek DST. Their inclusion in the firm’s monitoring does not mean that they are in receivership or face the same circumstances as The Walk.

Allegations That Sponsor Principals Misappropriated Investor Proceeds

The financial problems must also be considered alongside allegations concerning the use of DST investor funds.

In KHCA Funding LLC and Knights Hill Ireland II DAC v. Versity Invest, LLC, et al., Index No. 651885/2024, the lender-side plaintiffs alleged that Versity-related entities and principals Blake Wettengel, Tanya Muro, and Brian Nelson diverted more than $56 million in DST syndication proceeds that should have repaid the lender. The allegations concern proceeds from Hayworth, Vintage, The Walk, and One on 4th, including alleged use for unrelated real estate transactions and personal purposes.

On April 10, 2026, the court allowed key contract claims to proceed, including claims based on alleged alter-ego liability. That pleading-stage ruling did not establish that the alleged diversions occurred or absolve the defendants of the underlying allegations. See Court Allows Key Claims Against Versity/Crew, Wettengel, Muro, and Nelson to Proceed.

Earlier Allegations That Principals Defrauded Investors Were Due-Diligence Red Flags

The concerns extend beyond the 2024 lender litigation.

As discussed in Iorio Law’s earlier Hayworth Tanglewood investigation update, public lawsuits filed in November 2020 and June 2021 alleged similar misconduct involving Wettengel and Muro. Those allegations included defrauding investors by diverting syndicated funds away from the properties for which they were raised and using the money for undisclosed or improper purposes.

Those allegations are not presented as adjudicated findings. Their significance for selling broker-dealers is that litigation accusing sponsor principals of misusing investor money can be a material warning sign requiring investigation before recommending another offering managed by those principals.

Iorio Law is investigating whether selling firms discovered and evaluated that history, sought supporting records and explanations, and disclosed material allegations and related risks to investors. The relevant inquiry includes what information was available when each recommendation was made.

What Selling Broker-Dealers Should Have Investigated and Disclosed

FINRA’s Regulatory Notice 23-08 identifies issuer and management litigation history, affiliate transactions involving offering proceeds, and material developments during an offering as relevant areas of private-placement due diligence. It also explains that firms should independently verify material representations and investigate red flags rather than rely solely on the issuer’s assurances.

Applied to these offerings, the investigation should address:

• Prior investor-fraud allegations. What did public litigation reveal about the principals’ handling of investor money, and how did the firm evaluate and communicate material risks?
• Control over investor funds. Who controlled syndication accounts, property accounts, and transfers to affiliated entities? What safeguards existed against unauthorized use?
• Use of offering proceeds. Were funds used consistently with offering disclosures and financing obligations? Did the firm obtain evidence supporting the sponsor’s representations?
• Affiliated management and conflicts. Did common ownership of the sponsor, trustee, property manager, and other entities create incentives or opportunities to move funds away from investors’ properties?
• Financial condition and new developments. For recommendations made after adverse information became available, did firms update their review to address litigation, payment problems, or other material changes?
• Investor-specific risks. Were the investment’s illiquidity, expenses, financing risks, and potential loss of principal consistent with the customer’s financial needs and objectives?

For covered retail recommendations, Regulation Best Interest requires broker-dealers to consider an investment’s risks, rewards, and costs in light of the customer’s investment profile.

A lawsuit alone does not prove misconduct or automatically prohibit a recommendation. But material allegations that sponsor principals previously defrauded investors cannot be dismissed simply because they remain disputed. Selling firms must reasonably investigate relevant warning signs and provide disclosures sufficient to avoid misleading investors about material risks.

Later financial distress does not, by itself, establish a sales-practice violation. The central question is whether the brokerage firm fulfilled its obligations based on what it knew or reasonably should have discovered at the time.

Preserve Your Investment Records

Investors should preserve offering materials, subscription documents, account statements, distribution records, sponsor updates, and communications with the financial professional who recommended the investment.

Those records can help establish what was represented about income, principal risk, liquidity, sponsor history, and due diligence, and whether material information was omitted.

Contact Iorio Law About Your Crew DST Investment

Iorio Law PLLC represents investors nationwide in securities disputes involving DSTs, private placements, and other alternative investments.

Visit our primary DST investigation page for additional information about the firm’s investigation of Versity Investments, Crew Enterprises, and the brokerage firms that recommended their offerings.

If you invested in The Walk DST, Hayworth Tanglewood DST, Vintage DST, One on 4th DST, or Apex South Creek DST, contact Iorio Law to discuss your investment and potential legal options.

Call (646) 330-4624 or email info@iorio.law for a free case evaluation.

Hayworth Tanglewood DST has entered a substantially more serious stage of financial distress.

The senior mortgage lender has filed a judicial foreclosure action in Harris County, Texas, alleging payment defaults on a $48 million loan. On August 31, 2026, the court appointed a receiver to take control of the 246-unit Houston apartment property. The property is now being operated by Tarantino Properties rather than Crew Enterprises and its affiliated property manager.

The receivership is an important development for Hayworth Tanglewood DST investors. It confirms that control of the property has been removed from the sponsor, although it does not mean that a foreclosure sale has already occurred or that investors’ losses have been finally determined.

Iorio Law PLLC continues to investigate the sale of Hayworth Tanglewood DST and other Delaware Statutory Trust investments sponsored by Versity Investments and Crew Enterprises. Investors may have claims against the broker-dealers and financial professionals that recommended these investments.

Read our January 2026 Hayworth Tanglewood DST investigation and our broader Versity and Crew Enterprises DST investigation.

Key Hayworth Tanglewood DST Developments

The principal developments as of October 2026 include:

• The senior lender filed a judicial foreclosure action in Harris County, Texas.
• The lender alleges that the borrowers failed to make the required April 1, 2026 payment and continued to make only partial or insufficient payments.
• The lender accelerated the loan on July 31, 2026.
• The lender alleged that at least $47.28 million was due as of August 3, 2026, before additional interest, legal fees, receivership costs, and other charges.
• On August 31, 2026, the court appointed Sal Thomas as receiver.
• The Hayworth entities were divested of authority to operate and manage the property without the receiver’s approval.
• Tarantino Properties has assumed property-management responsibilities.
• Hayworth Tanglewood DST and Hayworth Tanglewood LeaseCo filed an Answer containing a general denial and specifically denying that they committed any act creating recourse or springing-recourse liability.
• A separate Delaware lawsuit concerning ownership of the DST and entitlement to eventual sale proceeds remains unresolved.

These developments do not establish the amount of any investor’s ultimate loss. They do, however, confirm that Hayworth Tanglewood DST is experiencing significant financial and operational distress.

Hayworth Tanglewood DST Offering Background

Hayworth Tanglewood DST was formed to acquire The Hayworth, a Class A multifamily apartment community located at 1414 Wood Hollow Drive in Houston, Texas.

According to the offering documents:

• Property: The Hayworth Apartments
• Location: Houston, Texas
• Units: 246
• Acquisition date: June 30, 2022
• Purchase price: $105.5 million
• Senior mortgage loan: $48 million
• Equity offering: Approximately $76.77 million
• Total offering price: Approximately $124.77 million
• Sponsor: Versity Invest, LLC, later renamed Crew Enterprises, LLC
• Managing broker-dealer: WealthForge Securities, LLC

The DST was marketed to investors seeking passive real-estate ownership and potential tax deferral through a Section 1031 exchange.

Investors, however, had little control over the property and depended on the sponsor, master tenant, property manager, trustee, and selling broker-dealers to protect their interests.

Senior Lender Files Judicial Foreclosure Action

The foreclosure and receivership case is pending in the 80th Judicial District Court of Harris County, Texas, under Cause No. 2026-55328. Public case information is available through the Harris County District Clerk.

According to the lender’s First Amended Petition, the $48 million loan was originated on June 30, 2022. The lender alleges that:

• The borrowers failed to make the payment due April 1, 2026;
• Subsequent payments were incomplete or insufficient;
• Additional defaults arose from substantial unsatisfied judgments against Versity/Crew-related parties;
• The property suffered from declining revenue and serious maintenance problems; and
• The lender accelerated the entire loan on July 31, 2026.

The lender seeks judicial foreclosure of the real and personal property, damages for breach of the loan agreement, attorneys’ fees, and enforcement of guaranty obligations against Blake Wettengel and Tanya Muro.

Court Appoints Receiver and Removes Sponsor Control

On August 31, 2026, the Texas court appointed Sal Thomas as receiver for The Hayworth.

The receivership order gives the receiver broad authority over the property, including authority to:

• Take exclusive possession and control of the property;
• Collect and control rents and other operating revenue;
• Control property bank accounts, books, records, leases, contracts, and tenant information;
• Hire or terminate property managers, employees, vendors, attorneys, consultants, and brokers;
• Make repairs and capital improvements;
• Establish operating and capital budgets;
• Investigate the property’s financial, structural, environmental, and operational condition;
• Prosecute or defend claims belonging to the property; and
• Market the property and negotiate a proposed purchase agreement.

The order expressly divests the Hayworth entities and their agents of authority to operate or manage the property without the receiver’s approval.

An actual sale still requires court approval. The receiver also cannot borrow against receivership assets or issue receiver certificates without an additional court order.

The court designated Tarantino Properties as property manager. The property’s current website now states that The Hayworth is under new management and exclusively managed by Tarantino Properties, Inc.

This confirms that the receivership has become operational, not merely procedural, and that Crew and its affiliated property manager no longer control day-to-day property operations.

Why the Receivership Matters to Hayworth DST Investors

A receivership is generally intended to preserve and protect property while litigation proceeds. Independent management may improve financial reporting, leasing, maintenance, security, and preservation of records.

The receivership may also impose additional costs. Receiver fees, property-management fees, repairs, professional expenses, taxes, and other court-authorized expenses may be paid from property revenue and may reduce the value remaining for equity investors.

The receiver’s authority to investigate and control the property’s financial records could prove especially important. Those records may reveal:

• How rents and reserves were used;
• Whether property funds were transferred to affiliates;
• The extent of unpaid vendor and repair obligations;
• The property’s current occupancy and operating performance;
• The cost of correcting deferred maintenance;
• The amount of default interest and lender charges;
• The property’s current market value; and
• Whether a sale, refinancing, or restructuring offers the best available recovery.

The Property Has Not Yet Been Sold Through Foreclosure

Appointment of a receiver is not the same as a completed foreclosure.

The receiver may operate and market the property, but a sale requires court approval. The receivership order does not itself determine:

• The final amount owed to the senior lender;
• The property’s current value;
• Whether the property will be sold, refinanced, or restructured;
• Whether the lender will recover the entire loan balance;
• The amount, if any, remaining for DST investors; or
• The amount of each investor’s loss.

Investors should therefore be cautious about assuming either that the investment is already a total loss or that the property can be stabilized without a significant impairment of principal.

Hayworth Entities File a Limited Answer

On September 21, 2026, Hayworth Tanglewood DST and Hayworth Tanglewood LeaseCo filed an Answer to the lender’s First Amended Petition.

The Answer contains a general denial and specifically denies that the entities committed any act or omission creating recourse or springing-recourse liability under the loan documents.

The Answer does not vacate or modify the receivership. It also does not constitute an admission of the lender’s other allegations. Under Texas procedure, a general denial ordinarily places non-verified allegations in dispute.

The filing appears to focus particular attention on whether liability extends beyond the mortgaged property. That issue may become important if a foreclosure or court-approved sale produces less than the amount owed to the senior lender.

Separate Delaware Lawsuit Creates Additional Uncertainty

Hayworth is also the subject of a separate ownership dispute in the Delaware Court of Chancery: Hayworth Tanglewood IB, LLC v. Hayworth Tanglewood DST, et al., C.A. No. 2025-0748-SEM.

The plaintiff in that case was the DST’s initial beneficiary and contributed more than $58 million toward the property’s acquisition. It alleges that, as interests were sold to outside investors, the defendants failed to use all required offering proceeds to redeem a corresponding portion of the initial beneficiary’s interest.

The plaintiff claims that it continues to own at least 60% of the DST and seeks, among other relief, a constructive trust and restrictions on the distribution of future sale proceeds.

On January 15, 2026, the Delaware Court of Chancery denied the defendants’ motion to dismiss or stay the action. The court allowed the claims to proceed but did not determine the correct ownership percentages or decide who is entitled to eventual disposition proceeds.

The Texas receivership does not resolve the Delaware ownership dispute. If the property is ultimately sold, the dispute over ownership and sale proceeds may become increasingly important.

Public Records Raise Questions About the Use of Hayworth Syndication Proceeds

Separate litigation pending in New York alleges that Versity, Wettengel, and Muro diverted syndication proceeds from Hayworth and other DST offerings to finance unrelated projects.

Publicly filed bank statements show that on November 17, 2022, $5 million was transferred from a Hayworth Tanglewood DST syndication account to another Versity-controlled account. The next day, that account wired $8.6 million to a title company in connection with the acquisition of Apex South Creek, an unrelated Florida property. The records were filed in KHCA Funding LLC, et al. v. Versity Invest, LLC, et al., Index No. 651885/2024.

The New York plaintiffs allege that Hayworth and other DST syndication proceeds were improperly used to finance the Apex acquisition after the bridge lender declined to fund that transaction.

Those allegations remain contested and have not been finally adjudicated. The banking records nevertheless raise substantial questions about whether Hayworth offering proceeds were used consistently with the representations made to investors and lenders.

They also raise an important due-diligence question: What did the managing broker-dealer and participating selling firms know, or what should they have discovered, about Versity’s financial controls, affiliated transactions, litigation history, and use of syndication proceeds?

Broker Dealers That Sold Hayworth Tanglewood DST

Based on information reviewed by Iorio Law, broker-dealers that sold or participated in the distribution of Hayworth Tanglewood DST include:

• AAG Capital, Inc.
• Aurora Securities, Inc.
• Cabin Securities
• Capulent, LLC
• Coastal Equities, LLC, now Realta Equities, Inc.
• Emerson Equity, LLC
• Lion Street Financial
• MSC-BD, LLC
• WealthForge Securities, LLC
• WestPark Capital, Inc.

WealthForge Securities served as the exclusive managing broker-dealer for the offering.

Selling commissions, dealer-management fees, broker-dealer allowances, and other offering expenses created substantial financial incentives to recommend the investment. Those incentives did not eliminate the firms’ obligations to investigate the offering, understand its risks, make fair and balanced disclosures, and determine whether the investment was in the customer’s best interest.

Potential Claims by Hayworth Tanglewood DST Investors

Depending on the investor’s circumstances and the representations made at the time of sale, potential claims may include:

• Failure to conduct reasonable due diligence;
• Violation of Regulation Best Interest;
• Unsuitable or inappropriate investment recommendations;
• Material misrepresentations and omissions;
• Failure to disclose sponsor-level litigation and misconduct allegations;
• Failure to disclose conflicts of interest;
• Negligence;
• Breach of fiduciary duty;
• Failure to supervise; and
• Overconcentration in illiquid alternative investments.

These claims are generally separate from the foreclosure and receivership proceedings. Investors may be able to pursue recovery from the broker-dealer that recommended the DST through FINRA arbitration even if the property remains in receivership or is eventually sold at a loss.

The receivership order does not release or transfer an investor’s direct claims against a brokerage firm or financial professional.

What Hayworth Tanglewood Investors Should Do

Investors should preserve:

• The private placement memorandum;
• Subscription and purchase documents;
• Account statements;
• Distribution records;
• Sponsor updates and investor letters;
• Emails and text messages with the financial advisor;
• Risk-tolerance and investment-profile documents;
• 1031 exchange documents;
• Marketing materials and presentations; and
• Notes concerning representations about income, safety, liquidity, property value, or sponsor due diligence.

Legal time limits may apply, and those limits do not necessarily wait for the foreclosure, receivership, or related litigation to conclude.

Iorio Law PLLC Represents DST Investors Nationwide

Iorio Law PLLC is a securities arbitration law firm representing investors nationwide in claims involving Delaware Statutory Trusts, private placements, alternative investments, and broker-dealer misconduct.

The firm is investigating the sale of Hayworth Tanglewood DST and other investments sponsored by Versity Investments and Crew Enterprises.

If you invested in Hayworth Tanglewood DST and would like to discuss your legal options:

Call: (646) 330-4624

Email: info@iorio.law

Free case evaluation: Contact Iorio Law PLLC

No recovery, no fee. Prior results do not guarantee a similar outcome.

The Court partially granted Defendants’ motion to dismiss. In plain English, the Court dismissed the fraud claims and several related claims. But the Court did not decide that Defendants did nothing wrong. Nor did the Court decide that no funds were misused or misappropriated.

Instead, the Court dismissed the fraud claims for a narrower legal reason: the Court found that the fraud claims overlapped with the breach-of-contract claims. In other words, the Court concluded that the same alleged misconduct—hiding DST syndication proceeds, diverting funds, and failing to repay the lender under the loan agreement—will still be addressed through the surviving contract claims.

This distinction is important for investors in Versity/Crew-sponsored Delaware Statutory Trusts, or DSTs.

The Court Did Not Clear Defendants of Misconduct

The Court’s ruling should not be read as a finding that Versity/Crew, Wettengel, Muro, or Nelson did not engage in misconduct.

Rather, the Court dismissed the fraud claims because, under New York law, a fraud claim may be dismissed when it is based on the same conduct as a breach-of-contract claim and does not involve a separate legal duty independent of the contract.

That is what happened here. The Court found that the alleged misrepresentations and alleged diversion of DST syndication proceeds were already part of the breach-of-contract theory.

As a result, the alleged misconduct remains very much at the center of the case.

Breach-of-Contract Claims Survived

Importantly, the Court allowed the breach-of-contract claims to proceed against several key defendants, including:

• Versity Invest/Crew Enterprises;
• Versity Investments;
• Blake Wettengel;
• Tanya Muro; and
• Brian Nelson.

Although those defendants were not the named borrower entities under the loan agreement, the Court found that the complaint adequately alleged, at this early stage, that they may be treated as alter egos of the borrowers, Versity EquityCo and Versity EquityCo II.

The Alter-Ego Allegations Remain Central

The Court found that the complaint sufficiently alleged that Versity Invest, Versity Investments, Wettengel, Muro, and Nelson acted together through various Versity-related entities to move DST syndication proceeds among themselves rather than using those funds to repay the lender.

The Court also noted allegations that corporate formalities were not respected and that allegedly diverted funds were used for personal or affiliated real-estate purchases, including:

• a $4.5 million residence in San Juan Capistrano, California; and
• two neighboring hotels in Anaheim, California purchased for a combined $20.6 million.

The Court further referenced allegations that more than $56 million in DST syndication proceeds were misappropriated instead of being paid to the lender.

These allegations have not been proven. But the Court found them sufficient, at the pleading stage, to allow the breach-of-contract and alter-ego claims to move forward.

Why This Matters to Versity/Crew DST Investors

This ruling is significant because many investors in Versity/Crew-sponsored DSTs have raised concerns about property performance, suspended distributions, sponsor risk, and the handling of investor funds.

The Court’s order does not decide whether Versity/Crew or its principals misappropriated money. But it confirms that allegations concerning the movement and use of DST syndication proceeds remain central to ongoing litigation.

For investors, the key takeaway is simple: the dismissal of the fraud claims does not mean the Court rejected the allegations of misconduct. The Court allowed core claims to proceed, including claims based on breach of contract and alter ego.

Iorio Law Is Investigating Versity/Crew DST Sales

Iorio Law PLLC is investigating the sale of DSTs sponsored by Versity Investments and Crew Enterprises, including:

• Vintage DST;
• Hayworth Tanglewood DST;
• One on 4th DST;
• The Walk DST;
• Apex South Creek DST; and
• other Versity/Crew-sponsored offerings.

Many investors purchased these products through broker-dealers and financial advisors who were required to conduct reasonable due diligence, understand the risks, and make recommendations that were in the investor’s best interest.

Investors may have potential claims if their broker-dealer failed to disclose material sponsor risks, failed to conduct adequate due diligence, or recommended an unsuitable DST investment.

Contact Iorio Law PLLC

If you invested in a Versity/Crew-sponsored DST and suffered losses, suspended distributions, or concerns about the handling of your investment, you may have legal options.

Iorio Law PLLC represents investors nationwide in securities arbitration claims against broker-dealers and financial firms.

If you invested in a Versity-sponsored DST, contact us today to review your legal rights.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

If you invested in this property, you were likely sold on the promise of a “stable,” “income-producing,” and “tax-advantaged” replacement property. However, recent data reveals a different reality.

Iorio Law PLLC is actively investigating One on 4th DST as part of our broader investigation into Versity/Crew Enterprises DSTs. Investor outcomes depend heavily on truthful disclosures and broker-dealer due diligence. When those fail, investors have the right to seek financial recovery.

What’s New: Q4 2025 Results Show Meaningful Losses

The Sponsor’s Q4 2025 investor update paints a concerning picture of the property’s financial health. For the fourth quarter of 2025:

• One on 4th LeaseCo, LLC reported a net loss of ($292,008).
• The Trust reported a net loss of ($1,673,262).

These losses are significant. DST investors typically rely on the Trust’s net cash flow (or reserve usage) for regular distributions and principal preservation. When a Trust runs deep quarterly losses, investors face heightened risks of continued distribution suspensions, further asset deterioration, and potential forced restructuring.

“Strong Occupancy” Does Not Guarantee Investor Safety

The Q4 2025 update notes that the property ended the quarter at 98.9% occupancy and describes the asset as “stabilized.” However, the update also acknowledges that operating performance remains heavily pressured by elevated costs—particularly property taxes, insurance, and utilities—which remain consistently above initial underwriting assumptions.

The bottom line: High occupancy does not equal sustainable distributable cash flow. For DST investors, success requires sufficient cash flow after debt service, taxes, insurance, property management costs, and other hidden charges.

Why the DST Structure Matters: Master Leases and the Fee Stack

One on 4th DST utilizes a master lease structure. The Trust leases the property to an affiliate (One on 4th LeaseCo, LLC), and another affiliate entity serves as the property manager. Affiliate-driven structures can create inherent conflicts of interest and severely reduce transparency, leaving investors dependent on sponsor-controlled reporting across multiple related entities.

Furthermore, this offering carried a massive upfront selling-cost and fee structure. The Private Placement Memorandum (PPM) notes that WealthForge Securities, LLC served as the exclusive managing broker-dealer. Selling commissions and expenses were capped at a staggering 9.33% (including selling commissions, dealer management fees, broker-dealer allowances, wholesaling fees, and offering expenses).

High-commission alternative investments often create dangerous incentives for:

• Aggressive sales practices.
• Incomplete discussions regarding risk and liquidity.
• “Rubber-stamp” due diligence by broker-dealers who ignore sponsor red flags.

Broker-Dealer Liability: Investigating One on 4th DST Sales

Over the past several years, One on 4th DST and other Versity/Crew-sponsored investments have reportedly experienced loan defaults, declining occupancy, significant accounts payable, suspended distributions, and a distinct lack of investor communication.

When transparency disappears, we ask the critical questions: Where did the offering proceeds actually go? Were reserve accounts properly maintained? Were related-party payments fully disclosed?

The Crux of the Claims: A Missed 2020 Fraud Lawsuit

At the heart of the claims against the selling broker-dealers is a glaring failure of due diligence, disclosure, and supervision.

Specifically, our investigation focuses on the failure of brokerage firms to detect and disclose that the principals of Versity/Crew, Blake Wettengel and Tanya Muro, were named as defendants in a lawsuit filed in November 2020. This lawsuit contained severe allegations that the principals defrauded investors by misappropriating syndicated funds for their own personal benefit.

For a broker-dealer, uncovering a prior fraud and misappropriation lawsuit against a sponsor’s principals is “Due Diligence 101.” Recommending a high-risk, illiquid DST like One on 4th without disclosing this massive red flag to retail investors represents a severe potential breach of regulatory obligations.

Reg BI, Suitability, and Failure to Supervise

Through FINRA arbitration, One on 4th DST investors may have strong claims against the brokerage firms that sold them these investments. Potential claims include:

• Failure to conduct reasonable due diligence into sponsor controls, related-party transactions, and prior litigation involving the sponsor’s principals.
• Misrepresentations and omissions regarding the safety, distribution risks, and the true track record of the sponsor.
• Regulation Best Interest (Reg BI) and Suitability violations, including over-concentrating investor portfolios in highly illiquid alternative investments.
• Failure to supervise brokers who aggressively marketed DSTs as “safe” or “stable” while downplaying or entirely omitting known structural risks and legal red flags.

“Bridge Equity” and Structural Risks

Additionally, the PPM describes the use of “bridge equity” to close the acquisition before sufficient DST interests were actually sold. It contains warnings that, in certain default scenarios, proceeds from the sale of DST interests could be demanded to satisfy obligations not directly tied to the property. Many retail investors were never meaningfully warned about this proceeds-flow risk.

Practical Next Steps for One on 4th DST Investors

If you invested in One on 4th DST and are currently dealing with suspended distributions or limited communications, it is time to protect your legal rights.

1. Gather Your Documents: Locate your subscription paperwork, the PPM, investor reports, email correspondence with your advisor, and account statements.
2. Identify the Seller: Note the specific advisor who recommended the investment and the broker-dealer firm they were registered with at the time of the sale.
3. Evaluate FINRA Arbitration Options: In many DST fraud and negligence cases, financial recovery is pursued directly against the selling broker-dealer. Brokerage firms carry meaningful insurance and represent a collectible source of recovery.

Contact Iorio Law PLLC Today

Iorio Law PLLC is actively investigating financial losses connected to Versity/Crew-sponsored DSTs, including One on 4th DST. If you are concerned about your suspended distributions, the lack of transparency, or the safety of your principal investment, we can evaluate whether a FINRA arbitration claim is appropriate for you.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
🖊️ Free Case Review: Contact Form

Current filings, arbitration claims, and sponsor disclosures point to serious financial irregularities, including misappropriation of funds, suspended distributions, and significant due diligence failures by the broker-dealers who sold these high-risk investments.

These developments are part of a growing series of Versity Investments lawsuits and Crew Enterprises lawsuit updates involving multiple DST offerings nationwide.

Investor Alert: If you invested in Hayworth Tanglewood DST or other Versity-sponsored offerings, your recovery window may be limited. Contact Iorio Law PLLC immediately for a case evaluation.

Property Profile: What is Hayworth Tanglewood DST?

Hayworth Tanglewood DST is a Delaware Statutory Trust formed to acquire a Class A, mid-rise multifamily residential property located in Houston, Texas. 

According to the offering documents:

• Property Type: Class A mid-rise multifamily community
• Property Address: 1414 Wood Hollow Drive, Houston, Texas 77057
• Units: 246 residential units
• Net Rentable Area: Approximately 351,000 square feet
• Site Size: Approximately 3.08 acres
• Occupancy at Acquisition: Approximately 94% leased
• Acquisition Date: June 30, 2022
• Purchase Price: $105.5 million
• Loan Amount: $48 million
• Offering Date: July 27, 2022
• Total Equity Raised: $76,767,365
• Total Offering Price: $124,767,365
• Loan-to-Offering Price Ratio: Approximately 38.47%
• Sponsor: Versity Invest, LLC

The offering was marketed aggressively to 1031 exchange investors.

Why Is Hayworth Tanglewood DST Under Investigation?

The investigation focuses on allegations that the sponsors—specifically principals Blake Wettengel and Tanya Muro—engaged in misconduct that jeopardized investor capital. Furthermore, the broker-dealers who recommended these products may have failed their regulatory duties to vet the sponsors before selling the DSTs to retirees and accredited investors.

Key Allegations and Red Flags:

• Suspended Distributions: Investors have reported halted monthly distributions, a primary indicator of cash flow distress and potential foreclosure risk.
• Misappropriation of Funds: Civil litigation alleges that syndicated investor proceeds were diverted, commingled with other property funds, or used for unauthorized bonuses and personal expenditures.
• Declining Valuation: Market reports in 2025 suggest the property value has fallen below the 2022 acquisition price.
• Prior Knowledge: Public lawsuits filed as early as 2020 alleged similar misconduct by the same principals, raising questions about why broker-dealers continued to sell these products in 2022 and/or fail to disclose the allegations.

The Role of Broker-Dealers: Liability for Due Diligence and Disclosure Failures

Investment firms are not merely order takers; they are gatekeepers. Under Regulation Best Interest (Reg BI) and FINRA Rule 2111, broker-dealers have a duty to conduct reasonable due diligence.

Further, under federal and state securities laws, they have a duty to disclose all material information and not to misrepresent any material information.

Selling Firms

Upon information and belief, the following FINRA-member firms sold Hayworth Tanglewood DST:

• AAG Capital, Inc.
• Aurora Securities, Inc.
• Cabin Securities
• Capulent, LLC
• Coastal Equities, LLC (now Realta Equities, Inc.)
• Emerson Equity, LLC
• Lion Street Financial
• MSC-BD, LLC
• WealthForge Securities, LLC
• Westpark Capital, Inc.

The PPM identifies WealthForge Securities, LLC as the exclusive managing broker-dealer, with authority to re-allow commissions to participating selling firms.

Broker-dealers received:

• 6.0% selling commissions
• 0.65% dealer management fees
• 1.0% broker-dealer allowance
• Additional wholesaling compensation

Total upfront selling compensation and offering expenses could exceed 9%.  The high sales commissions and fees can have a negative impact on the profitability of the property and the DST structure.

Potential Violations

Iorio Law is investigating whether these firms:

1. Ignored Red Flags: Failed to investigate the litigation history of Wettengel and Muro (Versity/Crew principals).
2. Disclosure Failures: Failed to disclose to investors that the principals of Versity/Crew, Wettengel and Muro, were previously alleged to have defrauded investors by diverting their funds away from the properties being purchase for syndication and used for undisclosed and improper purposes.
3. Overlooked Conflicts: Failed to analyze sponsor structure and conflicts of interest that involved the principals owning the management company and other affiliated entities, which allowed them to allegedly divert money away from the property.
4. Unsuitable Recommendations: Sold illiquid, high-risk DSTs to conservative investors, retirees, or those requiring stable income.

Sponsor Structure: Conflicts of Interest

The Hayworth Tanglewood offering documents (PPM) reveal a complex web of affiliate-controlled entities designed to extract fees regardless of property performance.

• Asset Management Fees: 1.0% of gross revenue to Versity.
• Property Management Fees: 2.5% of monthly gross revenue to Book and Ladder, LLC (affiliate).
• Bonus Rent: The “Master Tenant” (affiliate) participated in operating income.

These arrangements were not negotiated at arm’s length, creating a direct conflict between the sponsor’s desire for fees and the investors’ need for returns.

Allegations of Misappropriation by Versity, Crew Enterprises, Wettengel, and Muro

Arbitration filings and civil litigation allege that Blake Wettengel and Tanya Muro, principals of Versity Investments and later Crew Enterprises, engaged in:

• Diversion of syndicated investor proceeds
• Commingling of property funds
• Unauthorized transfers
• Payment of improper bonuses
• Use of DST capital for unrelated investments and personal expenditures

Importantly, these allegations pre-date the Hayworth offering. Public lawsuits filed in November 2020, and June 2021 alleged substantially similar misconduct involving the same principals and DST syndication structures.

Hayworth Tanglewood Performance Issues and Distribution Suspensions

According to investor claims and sponsor communications:

• Hayworth Tanglewood DST has experienced declining occupancy levels
• Distributions have been suspended for extended periods
• Sponsor communications regarding property performance have been limited
• Market valuations in 2025 reportedly reflected values below the 2022 acquisition price

Suspended distributions are often a warning sign of deteriorating cash flow and heightened foreclosure risk in leveraged DST structures.

What Hayworth Tanglewood Investors Should Do Now

If you invested in Hayworth Tanglewood DST or any Versity-sponsored DST, you may have claims for:

• Violation of Regulation Best Interest (Reg BI) (including failure to conduct reasonable due diligence)
• Material Misrepresentations and Omissions
• Breach of Fiduciary Duty
• Negligence and Failure to Supervise

These claims are typically pursued through FINRA arbitration, which allows investors to seek recovery directly from broker-dealers — even when sponsors face insolvency.

Iorio Law PLLC Represents DST Investors Nationwide

Iorio Law PLLC is a securities arbitration law firm representing investors nationwide. We specialize in recovering losses from unsuitable alternative investments and broker-dealer misconduct.

📞 Call: (646) 330-4624
📧 Email: info@iorio.law
📍 Location: New York, NY | Representing DST Investors Nationwide
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No recovery, no fee. Contact us today to review your legal options.