Hayworth Tanglewood DST Foreclosure and Receivership Update

October 2026 Update

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.