Rapid City SD – A complex web of corporate maneuvering is quietly determining the fate of Rapid City’s distressed apartment properties.

As Tzadik Rapid City Portfolio I, LLC approaches a critical Aug. 31 bankruptcy hearing, a seemingly independent buyer has emerged to recapitalize the portfolio.

But a paper trail — running from a press release eighteen months old to court filings from this week — shows this “new” buyer has been embedded in Tzadik’s finances since before the collapse began.

A Well-Timed Cash Advance

In March 2025, roughly a month before the first Tzadik entity in this case filed for Chapter 11, Atlanta-based mezzanine debt lender Nectar, Inc. issued a press release touting a surge of investments to open the year.

CEO and co-founder Derrick Barker announced more than a dozen deals totaling 1,359 units. Buried in the list: a $1 million “cash advance” for a 177-unit hotel property in Rapid City.

That number lines up with the Rushmore Hotel — a BW Premier Collection property roughly 30 minutes from Mount Rushmore itself, which court filings in its own, separate bankruptcy case describe as having exactly 177 rooms.

The advance went to the hotel, not to the apartment portfolio that would file for bankruptcy weeks later. But the timing is the point: Nectar’s relationship with Adam Hendry’s real estate empire didn’t begin with the collapse. It was already in place before the collapse started.

From Lender to Owner to Buyer

That March 2025 advance wasn’t the end of Nectar’s involvement with Hendry’s properties — it was the opening move.

Court filings from this year show the relationship didn’t just continue. It escalated, in a pattern that plays out entirely in the public record.

First, Nectar became a part-owner. Filings in the pending recapitalization deal at the center of the Rapid City apartment case show RE Nectar, Inc. already holds 100 percent of the preferred equity in two of Tzadik’s debtor entities — Tzadik Hidden Hills Apartments LLC and Garden Villas Apartments LLC — with Adam Hendry holding the common equity in both.

Both entities are also among the six debtor companies SD Purchaser LLC is now trying to buy out entirely. That preferred stake predates the deal now before the court.

The lender that pumped cash into Hendry’s properties in early 2025 had, by the time this recapitalization was ever filed, already secured a senior ownership position in pieces of the same portfolio.

Then, Nectar became the buyer. An entity named SD Purchaser LLC is now at the center of a proposed deal to recapitalize six of Tzadik’s debtor entities — including Rapid City Portfolio I — and satisfy Merchants Bank of Indiana’s settlement terms, heading off a court-supervised public auction.

Court records show the primary contact for that purchasing entity is Derrick Barker, addressed care of RE Nectar Inc.

Two confirmed points, both sourced directly to filings in the active bankruptcy case: Nectar already holds a senior equity position in two pieces of this portfolio, and Nectar’s own people are the contact behind the entity trying to buy six more pieces of it, including Rapid City’s. Whatever else is true about Nectar’s footprint in Hendry’s properties, that much is on the record.

Nectar, Inc. has separately been reported as holding a significant preferred-equity position — as much as 50 percent — in the Rushmore Hotel itself, the same 177-room property tied to that original March 2025 press release.

This means Nectar secured a controlling equity stake in the hotel within roughly a year and a half of first advancing it cash.

The August 31st Play

The deal SD Purchaser LLC is pursuing has two connected pieces.

Morgan Stanley Bank is providing roughly $66.5 million in new mortgage financing across eight of the portfolio’s nine South Dakota properties — enough, combined with other proceeds, to cover the $60 million threshold Merchants Bank’s settlement requires.

Separately, SD Purchaser LLC would buy out the membership interests in six debtor entities, including Rapid City Portfolio I, for a stated valuation of $122 million.

Aspen Park is one of the eight properties covered by the Morgan Stanley loan. Star Village is not.

Court filings confirm Star Village is excluded from the mortgage collateral and from the loan proceeds entirely — the filings themselves don’t say why.

Under the deal as proposed, Star Village would still change hands, moving to a newly formed ownership entity as part of the same transaction, but without any mortgage attached.

According to a separate agreement described in the filings, its new owner would then be expected to market and sell it later, on its own schedule — outside the bankruptcy court’s public auction process.

What Monday’s Hearing Actually Decides

Merchants Bank isn’t accepting the deal’s framing without a fight.

In its own filings, the bank has signaled it views the transaction as an acquisition, not a refinancing — a distinction that matters because only a qualifying refinancing satisfies the $60 million threshold in its settlement with the debtors. That dispute, not just the deadline, is what’s in front of the court on Monday.

Whatever the court decides, the practical stakes for Star Village are real.

If the deal is approved as structured, the property leaves the transparency of a bankruptcy auction and moves into private hands, to be resold at a time and to a buyer of the new owner’s choosing — with no court oversight of that later sale.

If the deal falls through, Star Village goes to the same public, court-supervised auction as the rest of the portfolio, alongside Aspen Park, on Oct. 26–28.

The question for Monday’s 1:30 p.m. hearing isn’t just whether this transaction qualifies as a refinancing.

It’s whether a lender who was extending cash advances into Hendry’s properties before the bankruptcy even began — and who has since built an ownership position inside the very portfolio now up for sale — ends up deciding Star Village’s fate without the public process the rest of the portfolio has to go through.

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Sourcing

Nectar, Inc. press release, March 11, 2025 (PR Newswire); U.S. Bankruptcy Court records for case 0:25-13865 and its jointly administered member cases, Southern District of Florida, including the Membership Interest Purchase Agreement and exhibits filed in support of the pending recapitalization motion; U.S. Bankruptcy Court records for the Tzadik Mount Rushmore Hotel, LLC bankruptcy, Case No. 26-20751