RAPID CITY, S.D. — A federal bankruptcy judge cleared the way Wednesday for two Rapid City apartment complexes, Star Village and Aspen Park, to be sold at auction, setting up a final sale hearing for November 3 even as a separate, competing deal to refinance the properties remains in play.
Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern District of Florida granted a motion approving bidding procedures for the properties in their entirety during a hearing Wednesday.
The ruling sets a Final Sale Hearing for November 3 at 2:30 p.m., the date on which the court would approve an actual winning bid if the auction proceeds.
The properties are owned by Tzadik Rapid City Portfolio I, LLC, one of several affiliated entities under Chapter 11 protection in a jointly administered bankruptcy case (Lead Case No. 25-13865-MAM) that also includes apartment portfolios in Sioux Falls and elsewhere in South Dakota.
Together, Star Village and Aspen Park represent 259 rental units — 81 at Star Village and 178 at Aspen Park.
Before the hearing formally began, discussions between counsel for the debtors and counsel for Merchants Bank appeared to still be underway, according to this reporter’s observation of the proceeding — a detail consistent with the case’s parallel settlement track described below.
A parallel track, still open
The auction is not the only path forward for the properties.
A separate motion filed August 24 asks the court to approve a recapitalization and refinancing transaction that would allow the debtors to avoid a sale altogether.
Under that proposal, a Delaware-registered entity, SD Purchaser LLC, would acquire the membership interests of Tzadik Rapid City Portfolio I and several affiliated companies from their current owners.
Court filings state that if Merchants Bank of Indiana, the properties’ secured lender, receives $60 million in cleared funds through the transaction, that would satisfy the “refinancing alternative” laid out in a prior settlement between Merchants and the debtors — the mechanism that could take the auction off the table.
The proposed deal includes acquisition financing from Morgan Stanley Bank, N.A., and carries a closing deadline of August 31, with a one-time 30-day extension available.
Wednesday’s ruling on bidding procedures does not resolve which path the properties ultimately take.
The court’s approval of the auction framework sets a firm backstop timeline regardless of the refinancing deal’s status — meaning the properties are now on a confirmed track toward a court-supervised sale process unless the parallel transaction closes first and satisfies the settlement independently.
What’s not yet public
Minimum bid thresholds and bidder eligibility requirements for the November auction were not confirmable from documents available as of this writing.
What’s next
The Final Sale Hearing is scheduled for November 3 at 2:30 p.m. before Judge Mora.
Wednesday’s hearing was held alongside proceedings in a related Tzadik hotel bankruptcy before the same court, part of a broader reckoning across the company’s multi-state property portfolio.
Sourcing
This report is based on court filings in Case No. 25-14655-MAM and Lead Case No. 25-13865-MAM, U.S. Bankruptcy Court, Southern District of Florida, and live coverage of the August 26, 2026 hearing.
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