ZOM Living Affiliate Files Chapter 11 Following $308.6M Judgment

By RadCRE Research · 2026-11-09 · Market Updates

A ZOM Living entity has filed for Chapter 11 protection in Florida following a $308.6M court judgment stemming from an Arizona dispute.

Chapter 11 Reorganization Triggered by $308.6M Judgment

In one of the most notable commercial real estate restructuring actions of the quarter, an affiliate of Winter Park, Florida-based developer ZOM Living filed for Chapter 11 bankruptcy protection [1]. The reorganization petitions, submitted on Oct. 30 in the U.S. Bankruptcy Court for the Middle District of Florida, represent the direct fallout of a massive $308.6 million court judgment entered against the company this spring [1].

The multi-hundred-million-dollar liability stems from a prolonged legal dispute tied to an Arizona property conflict with Gray Development [1]. According to court records, Gray Development alleged that ZOM utilized proprietary information prior to acquiring development sites independently [1]. Following the entry of the judgment, an affiliated entity moved into Chapter 11 to address the financial impact and support ongoing efforts surrounding the judgment [1], [2].

Plans to Sell Substantially All Assets

Under the leadership of CEO Greg West, ZOM Living has operated as a prolific developer and investor focused across the multifamily and senior housing sectors [1]. However, the scale of the $308.6 million judgment has driven the debtor affiliate to pursue structural liquidation alternatives within the federal bankruptcy framework [1].

According to court filings, the filing entity plans to sell substantially all of its assets through the Chapter 11 process [1]. In distressed commercial real estate situations, court-supervised asset sales under Section 363 of the Bankruptcy Code frequently serve as a mechanism to clear encumbrances, resolve substantial litigation claims, and maximize asset recovery for creditors and stakeholders under court administration.

Litigation Liabilities and Developer Capital Structures

The Chapter 11 filing highlights how extraordinary legal liabilities outside of direct operational distress or balance-sheet debt can abruptly impair active real estate operating companies [1]. While developers routinely structure project-level limited liability companies to ring-fence specific multifamily or senior housing developments, parent-level or affiliate judgments of this magnitude create severe capitalization shocks [1].

With plans now established to market and liquidate the filing entity's portfolio assets, institutional capital and distressed debt market participants will be closely monitoring court proceedings in Florida's Middle District to evaluate the disposition timeline, court-mandated sale procedures, and the ultimate recovery path for involved claimants [1].

RadCRE Perspective

"When an adverse judgment eclipses $300 million, traditional balance-sheet workouts are often unfeasible outside of a formal restructuring forum," says Majid Radaei, Founder and Principal Broker of RadCRE. "For institutional multifamily and senior housing developers, Chapter 11 provides a structured venue to conduct an orderly asset sale process while navigating massive, non-operational liabilities. As these assets move to market through bankruptcy administration, we anticipate intense scrutiny from opportunistic capital seeking value-add and core multifamily holdings."

Tags: commercial real estate bankruptcy, Chapter 11 restructuring, multifamily development bankruptcy, distressed CRE assets