Troubled Houston real estate investor Rao Polavarapu is facing a new lawsuit after filing for bankruptcy in November. Computershare Trust Company, serving as trustee for Wells Fargo, has filed suit claiming that Polavarapu remains responsible for a $30.1 million debt on a commercial mortgage-backed securities (CMBS) loan he personally guaranteed.
The loan in question was used to finance the Falls at Westpark, a 352-unit apartment complex located at 6130 Southwest Freeway in Houston. According to the lawsuit filed December 23 in New York Supreme Court, Polavarapu stopped making payments on the $29 million loan in July 2025 and also failed to keep up with property insurance requirements. The amount now sought by Computershare includes unpaid principal, default interest, late fees, yield maintenance premiums, and other costs.
Computershare alleges that Polavarapu attempted to avoid foreclosure by filing for Chapter 11 bankruptcy one day before the scheduled auction of the Falls at Westpark property.
Polavarapu’s firm, Falls Apartment Group, has reportedly been under financial pressure for over a year. The company previously faced foreclosure actions on two other multifamily properties: the Falls of Las Villas and the Falls of Alta Vista in Pasadena, Texas. These foreclosures were linked to an apparent default on $33.5 million in loans tied to those assets.
In July 2025, four additional properties owned by Polavarapu went into special servicing when two CMBS loans totaling $89.5 million showed signs of distress.
Across the industry, lenders have increasingly pursued legal action against multifamily investors who are unable to repay their debts despite personal guarantees on their loans. For example, Starwood Capital and Acres Capital have initiated lawsuits against Tides Equities’ Sean Kia and Ryan Andrade for similar guarantees; meanwhile Acore Capital Mortgage is seeking repayment from Jon Venetos of Lurin Capital related to nearly $400 million in loans.
“Polavarapu filed for Chapter 11 bankruptcy the day before the property was scheduled to be sold at a foreclosure auction,” according to Computershare’s court filing.
