Rapid City SD – For the people who live at Star Village and Aspen Park, the bankruptcy deciding the future of their homes has mostly played out in a courtroom in West Palm Beach, Florida, about 1,800 miles away, in filings that run close to 100 pages apiece. The answers to the questions tenants actually have are in there. They’re just buried.
Both properties are scheduled for an online auction ending in the first days of December. Here is what the court record says about your lease, your deposit, and who your landlord is between now and then.
Is my home being sold?
Yes, most likely. Star Village (27 Signal Drive) and Aspen Park (426–434 East Fairmont Boulevard) are owned by Tzadik Rapid City Portfolio I, LLC, one of eight Tzadik companies in a jointly administered Chapter 11 bankruptcy.
The lender owed money on the properties, Merchants Bank of Indiana, has the right under the company’s confirmed bankruptcy plan to have them sold at public auction (Doc. 689, § 5.7).
The online auctions run Nov. 30 through Dec. 2, 2026, through the auction platform Ten-X.
A final court hearing to approve the sales is set for Dec. 4 (Doc. 865).
Merchants Bank can bid using the debt it’s owed instead of cash, so the winning buyer could be an outside investor or the bank itself (Doc. 833).
Does the sale cancel my lease?
No, if you have a written lease.
The bank’s own auction motion describes the properties as “occupied by residential tenants with written lease agreements granting occupancy” and states that those leases “will not be extinguished” by the sale (Doc. 812, ¶ 26).
The court-approved sale terms say the properties are sold free and clear of other liens and claims “other than tenant leasehold interests created by the Leases” (Doc. 833).
In plain terms, whoever buys the property takes it with your lease in place.
One caution: the bank’s motion also says it “makes no representations or warranties as to the validity and enforcement of the Leases” (Doc. 812, ¶ 26).
The sale won’t cancel your lease, but the bank isn’t vouching for any individual lease either.
What about my security deposit?
Your right to it was preserved in the bankruptcy, not wiped out.
The company’s confirmed bankruptcy plan treats every tenant lease as continuing and states: “All rights to security deposits and rights to prepaid rents shall be preserved for the benefit of tenants” (Doc. 689, Art. IX).
The court confirmed that plan on May 19, 2026, without changing that section (Doc. 773).
When the case was filed in 2025, Tzadik Rapid City Portfolio I listed $149,077.98 in security deposits owed to 210 tenants and $21,806.14 in prepaid rent owed to 32 tenants (Doc. 23, p. 22).
“Preserved” means tenants’ legal right to their deposits was protected. The filings do not show whether deposit money is being held separately.
What the filings don’t spell out is the mechanics after the sale closes: whether the new owner or the old company is the one who actually returns your deposit when you move out. That question hasn’t been answered in the record yet.
My lease ran out and I pay month to month. Am I covered?
That’s the least clear part of the record.
The bankruptcy plan kept all unexpired leases in force, without limiting that to written ones (Doc. 689, Art. IX).
But the auction protection specifically covers tenants “with written lease agreements” (Doc. 812, ¶ 26).
If your written lease expired and you’ve stayed on month to month, the filings don’t say clearly which side of that line you fall on.
After a sale, month-to-month tenancies are generally governed by South Dakota landlord-tenant law.
Who is my landlord right now?
Until the sale closes, it’s still Tzadik Rapid City Portfolio I, LLC.
The court’s confirmation order states that Tzadik Properties and its manager, Adam Hendry, “will continue to manage the Debtors” (Doc. 773). Hendry holds a 69.24% ownership stake in the Rapid City company (Doc. 823, Ex. A).
That means rent, repair requests, and complaints still go through Tzadik’s management until a buyer takes over.
Your deposit rights under South Dakota law
Whoever owns the building, South Dakota law sets basic rules for residential security deposits:
- The cap. A landlord can’t require a deposit of more than one month’s rent, unless both sides agree to more because of special conditions (SDCL 43-32-6.1).
- 21 days to return it. Within 21 days after your tenancy ends and you give your landlord a mailing address, the landlord must return your deposit or give you a written statement of the specific reasons for keeping any of it (SDCL 43-32-24).
- Limited deductions. A landlord can keep only what’s reasonably needed to cover unpaid rent or other money owed under the lease, and to repair damage beyond ordinary wear and tear (SDCL 43-32-24).
- An itemized list on request. If you ask, the landlord must give you an itemized accounting of anything withheld within 45 days after the tenancy ends (SDCL 43-32-24).
- Penalties. A landlord who doesn’t follow these rules loses the right to keep any part of the deposit. Keeping a deposit in bad faith can bring punitive damages of up to $200 (SDCL 43-32-24).
South Dakota’s lease law does not require landlords to keep security deposits in a separate or escrow account.
What should I do now?
- Keep your paperwork. Your lease (including any expired one), any renewal, and your security deposit receipt.
- Keep proof of rent. Receipts, bank records, or money order stubs showing what you’ve paid and when.
- Put repair requests in writing and keep a copy, with the date.
- Take dated photos of your unit’s condition, especially before any change in ownership.
- Get help if you need it. Dakota Plains Legal Services provides free civil legal help to eligible South Dakotans, or you can consult a local landlord-tenant attorney.
This article explains what court records say. It is not legal advice for any individual situation.
Key dates
- Nov. 2, 2026: Deadline for a “stalking horse” bid, an early offer that sets the opening price (Doc. 865)
- Nov. 30–Dec. 2, 2026: Online auctions on Ten-X (Doc. 865)
- Dec. 4, 2026, 10 a.m.: Final sale hearing, held by Zoom only (Doc. 865)
Sourcing
U.S. Bankruptcy Court for the Southern District of Florida, Lead Case No. 25-13865-MAM and member case No. 25-14655-MAM (Tzadik Rapid City Portfolio I, LLC): Schedules (Doc. 23); Third Amended Joint Chapter 11 Plan of Reorganization (Doc. 689); Order Confirming Plan (Doc. 773); Auction Motion (Doc. 812); Membership Interest Purchase Agreement exhibits (Doc. 823); Auction Order and Auction Notice (Doc. 833); Order Rescheduling Auctions (Doc. 865). South Dakota Codified Laws, Chapter 43-32 (Lease of Real Property), including §§ 43-32-6.1 and 43-32-24.
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