Hayworth Tanglewood DST: Chancery Ruling and Versity Form Ds

What the Chancery report is, and what kind of ruling it is

The document is a magistrate's report, not an opinion of the Chancellor. Its last page says: “This is a magistrate's report under Court of Chancery Rule 144 and exceptions are stayed per Rule 144(c)(2)(A).” The case was heard first by the Chancellor, who on August 1, 2025 denied a temporary restraining order, set notice and timing requirements for any sale of the property and told the parties to confer on scheduling. It was reassigned to the Senior Magistrate on October 1, 2025, who stayed discovery on October 22, 2025 and then ruled on the papers after the defendants' counsel moved to withdraw on January 8, 2026.

The report states its own limit in a footnote: “The facts are drawn from the Plaintiff's verified complaint.” On a motion to dismiss, the court's standard (quoted in the report) is that “all well-pleaded factual allegations are accepted as true”. That is a rule for deciding whether a case may go forward, not a finding that the events happened. We therefore write “alleges” for every fact below, and we name companies and the court only; the report and the SEC forms also name private individuals, whom we leave out.

The structure the report describes: bridge equity in a DST

The report's account of the money is short, and it is the part of this case that applies beyond one property. In the plaintiff's version:

The offering document's own language explains why the structure matters to a buyer. As the report quotes it, the private placement memorandum says that “if any Interests in the Trust cannot be sold, the Initial Beneficiary and its affiliates will own the remaining Interests.” In other words, the entity that put up the equity at closing stays on the cap table until the investors' money replaces it, and the money that replaces it is meant to repay what that entity borrowed. If sales are slower than the plan, or if the repayment and the redemption do not move together, there is a gap between what the lender is owed and what the sponsor-side holder still owns. The plaintiff alleges that is what happened here; the defendants dispute the case, and the court has not ruled on it.

Two figures in the report do not reconcile on their face, and the report does not try to. The complaint, as recited, puts the sales at over $37 million of nearly $78 million, while the plaintiff asks for a declaration that it keeps “no less than 60%”. The trust's Form D lists a total offering of $76,767,365, not “nearly $78 million”. The different numbers come from different documents (the complaint's description of the memorandum, and the Form D the sponsor filed), and neither has been tested in court.

The other two cases: what is allegation and what is read

New York. The report says that in April 2024 the Bridge Lender sued the trust, among others, “for alleged fraudulent misappropriation of syndication proceeds”, in the Commercial Division of the New York Supreme Court, New York County, under the caption KHCA Funding LLC v. Versity Invest, LLC. The report describes it as pending as of its date. We have not read the New York docket; the Chancery report is our only source for its subject, and a law-firm blog gives its index number as 651885/2024 and describes bank records filed there, which we have not verified and do not repeat as fact.

Texas, reported after the Chancery report. A plaintiff-side securities law firm's blog dated October 14, 2026 says the senior mortgage lender sued for judicial foreclosure in Harris County, Texas, that a court appointed a receiver on August 31, 2026, and that the trust and its master tenant filed an answer on September 21, 2026 containing a general denial. That is advocacy writing by a firm that solicits investor clients, and we could not open the Harris County docket. Treat it as a lead to check, not as a record. The same post says the receivership does not decide the Chancery ownership dispute; that is consistent with the Chancery report, which says nothing about a foreclosure.

The Form D record: 16 issuers, 17 filings

The sponsor-side names in the case also file with the SEC. Searching EDGAR for the name Versity returns four issuers with Form Ds: Versity Investments Income Fund I, LLC (CIK 1823190), Versity Investments Income Fund II, LLC (1889733), Versity Clemson Income Notes, LLC (1989861) and Versity Income Property Notes, LLC (1989982). A fifth, Crew Campus, Inc. (CIK 2013005), lists its previous name as “VERSITY STUDENT HOUSING REIT, INC.” A search for the street address on those forms, 20 Enterprise, Suite 400, Aliso Viejo, California, finds eleven more issuers whose Form Ds list the same address and the same two related persons, including Hayworth Tanglewood, DST (CIK 1937120). The Hayworth form states that those two persons are managers of the manager of the signatory trustee. That is the basis for the grouping. A shared address and related persons on a Form D does not by itself say that two entities are affiliated for any purpose other than the filing.

How we counted. We used each issuer's latest Form D or Form D/A. Vintage, DST filed a Form D on April 22, 2022 and a D/A on March 6, 2023 with identical amounts, so it counts once (17 filings, 16 issuers). “Offered” is totalOfferingAmount, “sold” is totalAmountSold and “investors” is totalNumberAlreadyInvested, all as of the filing date. Commissions are the Form D's estimate of sales commissions if all securities are sold. A $0 sold figure usually means the form was filed before the first sale, not that nothing was ever sold. These are filing-day snapshots; they say nothing about performance or about any wrongdoing.

Versity-named issuers and Crew Campus:

The four Versity-named funds are debt-type offerings (notes and income funds), not DSTs, under Rule 506(b); Crew Campus is a Maryland corporation relying on Rule 506(c). Only two of the five report a sale: Versity Income Property Notes (first sale August 10, 2023) and Crew Campus (first sale February 29, 2024).

Eleven other issuers at the same address and with the same two related persons, mostly DSTs:

All 16 issuers together: $596,509,920 offered, $52,176,586 sold when filed (8.7%, our arithmetic), 166 investors and $51,170,895 of estimated commissions. The ten DST Form Ds estimate commissions at exactly 9.0% of the offering each, the same load our DST fee analysis finds across the market. For Hayworth that is $6,909,063 on $76,767,365, and the form separately estimates $4,747,500 of gross proceeds going to the executive officers, directors or promoters named on the form (6.2% of the offering, our arithmetic).

What the Form D cannot tell you. Hayworth's form was filed on July 11, 2022, eleven days after the trust bought the property, with $0 sold and the date of first sale marked “yet to occur”. It has never been amended, so the SEC record does not show the more than $37 million that the complaint alleges was sold. The same is true of the other zero-sold forms. To know what any one trust raised, you need its subscription documents and trustee reports.

For earlier filings by NB Private Capital after the 2018 Nelson Brothers split, see our Nelson Partners page. For another DST sponsor's failure on a court docket, see what happened to Inspired Healthcare Capital's DSTs, and for how the trust structure works and why it is hard to leave, our Delaware statutory trust guide.

What is and is not known as of October 29, 2026

What a reader can do with this

• Read your own paper first. If you hold a Versity-sponsored interest, the trust agreement and private placement memorandum are the documents the court is reading. Look for how sales proceeds are to be applied, whether the sponsor-side holder keeps unsold interests, and whether the trustee owes you reports.
• Pull the Form D by CIK. The census table gives each issuer's CIK; EDGAR shows the form and its accession number. Compare the offering amount and the commission estimate with what your selling firm told you.
• Check the dockets yourself. The Chancery case is C.A. No. 2025-0748-SEM; the New York case is KHCA Funding LLC v. Versity Invest, LLC. A law firm cites Harris County cause number 2026-55328 for the foreclosure; we have not confirmed it. Docket entries after January 15, 2026 are what this page lacks.
• Treat law-firm alerts as marketing. Several firms advertise investigations of this sponsor and of selling firms. Those pages are advocacy by firms seeking clients, not findings.
• Keep your selling papers, including the subscription agreement, the memorandum and any suitability paperwork, and ask a lawyer about deadlines that apply to claims against any party.
• Ask a CPA how a loss or a sale is taxed, including what happens to the 1031 deferral you used to buy in. Our DST guide covers the structure.

FAQ

Sources, read on October 29, 2026: Report of Senior Magistrate in Chancery Selena E. Molina, Hayworth Tanglewood IB, LLC v. Hayworth Tanglewood, DST, et al., C.A. No. 2025-0748-SEM (Del. Ch. January 15, 2026), courts.delaware.gov/Opinions/Download.aspx?id=390140 (full text, 19 pages); SEC EDGAR Form D and Form D/A filings by Versity Investments Income Fund I, LLC (CIK 1823190, accession 0001823190-20-000001), Versity Investments Income Fund II, LLC (1889733, 0001889733-21-000001), Versity Clemson Income Notes, LLC (1989861, 0001989861-23-000001), Versity Income Property Notes, LLC (1989982, 0001989982-23-000001), Crew Campus, Inc. (2013005, 0002013005-24-000001), Hayworth Tanglewood, DST (1937120, 0001937120-22-000001) and ten other issuers listed in the dataset; EDGAR full-text and submissions searches by issuer name and address; secondary sources, each marked as such: Iorio Law PLLC blogs of January 20, 2026 and October 14, 2026 (receivership, answer and case numbers, not verified against dockets) and InvestmentNews, January 19, 2026. We could not open the Chancery docket, the New York docket or the Harris County docket. Totals, shares and counts are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.