FNRP Lawsuit Oct 2026: 3 Open Cases, Dockets and SEC Filings

Updated October 15, 2026: no ruling on the arbitration motion, one new order in the third case, and a correction on SEC filings. We re-read the CourtListener docket listings of the three open New Jersey cases on October 15, 2026. In No. 3:25-cv-01119 the motion to compel arbitration docketed on September 23, 2026 (entry 76) still has no ruling; the newest entries are letters of September 28 and 29 (entries 77 and 78), a stipulation on October 2 (entry 79) and a text order on October 5. In No. 3:25-cv-13714 the newest entries are a stipulation on October 2 (entry 19) and a stipulation and order on October 6 (entry 20). In No. 3:26-cv-08948, stayed since August 3, 2026, the docket lists a stipulation on October 2 (entry 6) and, new since our last check, an "Order on Motion for Magistrate Judge" on October 13 (entry 7). We have not read the text of any of these entries, so we do not know what they decide. Correction: on October 11 this page said that no FNRP issuer had filed a Form D since December 15, 2023. That was wrong: our check covered only the 28 funds in the court papers, Funds I to IV and FNRP Opportunity Fund 1. A search of SEC EDGAR for filings that list one or both of FNRP's founders as executive officers finds 19 Form D filings from 16 issuers between January 23, 2024 and May 19, 2026: 11 new grocery-center funds in Red Bank, New Jersey (offerings of $92,645,546 in total and $3,425,000 sold to 57 investors at filing, our arithmetic; the newest is Marcs Center SC Realty Fund LLC, filed December 16, 2025, $7,134,165 offered), four PickleRage entities in Miami Beach, Florida, and one fund in Fort Lauderdale with a $25,000 minimum (table below). The 2024 to 2026 acquisitions FNRP announces do have new Form Ds behind them. We found no SEC enforcement action against FNRP in EDGAR full-text search or a web search on October 15, and FINRA BrokerCheck lists no firm named FNRP or First National Realty Partners; neither is a clean bill of health, only what the searches show. FNRP itself reports that in 2025 it did "more than $200 million in capital markets transactions" and more than 1.5 million square feet of leasing, and that in March 2026 it bought Marc's Grocery Center in South Euclid, Ohio (company claims, below).

FNRP lawsuit: status as of October 15, 2026

There are four federal cases with FNRP on one side and its own investors on the other. One is closed. Three are open, all in the District of New Jersey, the first two before U.S. District Judge Michael A. Shipp (with Magistrate Judge J. Brendan Day); the third carries the judge initials ZNQ-JTQ in its case number, which differ from the MAS-JBD of the first two, so we do not assume it sits with the same judge. We read the court's opinions and orders, the two investor complaints that are public, and the dockets. We do not name the individual investors.

How it started: FNRP sued its investors first

The first filing was FNRP's. According to the court's June 5, 2025 opinion, counsel for seven investors sent FNRP a draft complaint on February 2, 2025 and said it would be filed in New Jersey federal court. FNRP's position was that every investor had signed an arbitration clause. On February 10, 2025 FNRP filed a verified complaint asking the court to declare the arbitration clauses enforceable and to stop the investors from suing. The investors filed in the Eastern District of New York the next day, February 11, 2025.

The opinion also records that the investors' lawyer said they would not accept anything less than the return of the full amount they invested, which the court put at $12 million. FNRP argued that the “frivolous” lawsuit would cause it reputational harm and loss of goodwill. The court never reached that question. Because the New York complaint had already been filed, it denied the request for a restraining order as moot on June 5, 2025. By then the investors had already dropped the New York case, on March 7, 2025, without prejudice.

One correction to what circulates online, including an earlier version of this page: the court did not sanction an investor for contempt. FNRP asked the court to order the investors' former lawyer to show cause why he should not be held in contempt for missing a deadline. On September 25, 2025 the court denied that motion as moot after new counsel appeared for the investors.

The arbitration ruling of August 27, 2026

This is the main development since our last update. FNRP's motion to compel arbitration (filed March 5, 2025) asked the court to send the claims in the draft complaint to arbitration. Judge Shipp denied it without prejudice for two reasons: the draft complaint was never filed, so ruling on it would be an advisory opinion, and the New York complaint had been withdrawn. He did not decide whether the investors' actual counterclaims belong in arbitration. In his words: “Should Plaintiffs wish to compel arbitration of the Counterclaims, Plaintiffs must file a motion seeking that relief.” The docket shows a new motion to compel arbitration filed on September 23, 2026. That motion is now the hinge for every case: the parties in 3:25-cv-13714 agreed that the court's ruling on arbitration in the first case binds their case too.

The agreements in question are the ones FNRP investors sign. Per the court, the subscription agreements send any controversy with the fund or its managing member to arbitration under American Arbitration Association commercial rules, in the state of the managing member's principal office, with no punitive damages. Tenant-in-common purchase agreements have a similar clause. If FNRP wins the new motion, the claims may move out of public court and into private arbitration.

The consolidation ruling of March 26, 2026

The seven investors and the 3:25-cv-13714 plaintiffs asked to merge their cases. Magistrate Judge Day agreed the cases overlap heavily (the complaint and the counterclaims share thirteen identical or virtually identical counts) but denied consolidation without prejudice because the arbitration motion was still pending, noting that “there is an open question whether these cases will remain in this Court at all.” The same order gives the clearest figures for the money involved: the seven investors put about $12.2 million into 21 FNRP-sponsored funds and the second group about $9.4 million into 28 funds, throughout 2022 and 2023.

The third investor suit (July 17, 2026)

A new group of investors (individuals, a family trust and investment companies) filed No. 3:26-cv-08948 on July 17, 2026, represented by the same New Jersey lawyer as the 3:25-cv-13714 plaintiffs. The defendants are First National Realty Partners LLC, First National Realty Advisors, LLC, First National Property Management LLC, and eight of FNRP's officers. The complaint claims actual damages of at least $9,530,776.07, treble damages under RICO and punitive damages of five times actual damages. The docket shows the case was stayed on August 3, 2026. Since then it lists a stipulation on October 2 (entry 6) and an order on a motion for a magistrate judge on October 13 (entry 7); we have not read either. The case number carries the judge initials ZNQ-JTQ, not the MAS-JBD of the first two cases.

The court index also lists a separate case in the District of Nevada naming First National Realty Partners (No. 2:26-cv-00494, filed February 23, 2026). Its complaint is not on the free docket, so we do not describe it.

What the investors allege (allegations, not findings)

The 2025 and 2026 investor complaints are nearly the same document. According to the 3:25-cv-13714 complaint, the defendants allegedly:

• paid transaction-based compensation to employees and salespeople without a broker-dealer license, which the complaints call illegal commissions under Regulation D;
• overvalued the properties, so investors paid more for their shares than FNRP paid for the buildings, and inflated value-based fees;
• made unauthorized transfers and distributions and used related companies to move money out of the properties;
• presented projections with fixed-rate debt when some properties had variable-rate loans, and promised annual cash distributions of 6% or more and returns of 12% to 18%;
• named FNRP's own affiliate as asset manager and leasing agent, with removal requiring unanimous consent, and charged the funds for construction work through an affiliated company.

The complaints give specific examples. Summerdale Plaza was allegedly bought for about $17.25 million (paragraph 91 of the same complaint says about $18 million), marketed as a stabilized, extremely conservative investment, and on February 6, 2025 investors were told it had been sold for about $15 million, which the complaint calls a loss of about 60% for investors. For Tropicana Centre in Las Vegas, the complaint alleges a final purchase price of $71.929 million against $82.424 million escrowed for the purchase. These are the plaintiffs' numbers. FNRP denies the allegations and has published a statement calling them baseless, and none of the four court orders we read decides whether any of them is true.

The counterclaims in 3:25-cv-01119 bring 30 causes of action and the 3:25-cv-13714 complaint 34, including federal RICO, mail and wire fraud, fraudulent inducement, negligent misrepresentation and state securities-law claims.

The Form D filings of the 28 funds in the court papers

FNRP raises money fund by fund under Regulation D, and every fund files a Form D with the SEC. We pulled the latest Form D of each of the 28 FNRP-sponsored funds named in the court papers (17 fund entities that are co-plaintiffs in 3:25-cv-01119 and 11 more named in the 2026 complaint). Every one lists Anthony Grosso and Christopher Palermo, with Red Bank, New Jersey addresses, among the related persons. Together they registered $482,150,197 of offerings (our arithmetic), every one with a $50,000 minimum investment.

Read the "sold" column carefully. Most of these Form Ds were filed days after the first sale and never amended, so the figure is what was sold by that date, not what the fund raised. Only six of the 28 latest filings are amendments. The fullest: Brandywine Crossing had sold $28,753,865 of a $28,900,000 offering to 238 investors, and HV Center the full $8,764,000 to 122 investors. The most recent Form D in the set is Elements Horsham's, filed December 15, 2023. Every one we read reports $0 in sales commissions and $0 in finders' fees. The complaints allege that employees were paid transaction-based compensation, including under a bonus pool, and a Form D entry does not settle that question.

FNRP-linked Form Ds filed since January 2024

Our October 11 check said no FNRP issuer had filed a Form D after December 15, 2023. It missed these because it only looked at the funds named in the court papers. Searching SEC EDGAR for Form Ds that list one or both of FNRP's founders as executive officers finds 19 filings from 16 issuers between January 23, 2024 and May 19, 2026, every one claiming Rule 506(c), every one reporting $0 in sales commissions. Eleven are new grocery-center funds at FNRP's Red Bank address, with $92,645,546 of offerings and $3,425,000 sold to 57 investors at the dates of their filings (our arithmetic). All eleven list a $50,000 minimum, and none was named in the court papers.

Two of them match acquisitions FNRP announced. Marcs Center SC Realty Fund LLC filed on December 16, 2025 for a $7,134,165 offering, with $1,245,000 sold to 22 investors after a first sale on November 13, 2025; FNRP says it bought Marc's Grocery Center in South Euclid, Ohio in March 2026. Salisbury SC Realty Fund LLC filed on August 21, 2025 for $6,584,839. A purchase agreement dated August 8, 2025, filed as an exhibit to an 8-K of Medalist Diversified REIT, Inc., sets a $10,000,000 price for Salisbury Marketplace Shopping Center in Salisbury, North Carolina, with the buyer, Salisbury SC LLC, at FNRP's Red Bank address. The difference between the $10 million price and the $6.58 million equity offering is the debt. Outside the grocery funds, four issuers named PickleRage or Holding LLC in Miami Beach, Florida (a pickleball venture; industry group "Retailing" or "Other") filed seven Form Ds between June 28, 2024 and May 19, 2026, and BV Cap Cana Realty Fund LLC in Fort Lauderdale filed on July 3, 2025 for $2,003,700 with a $25,000 minimum. We do not know how, or whether, they are tied to FNRP's investors, and none of the 19 filings says anything about the lawsuits.

Same caveat as above: a Form D is a notice, filed days after the first sale. It does not say how much a fund finally raised or what it paid.

The offering amount is the equity each fund planned to raise, not the property price, which also includes mortgage debt. That is why Summerdale Plaza's $8,800,000 offering sits next to the roughly $17.25 million purchase price alleged in the complaint. For how Form D data works across sponsors, see our real estate syndication Form D dataset.

What an FNRP investor or prospect can do with this

• If you hold an FNRP fund: find your subscription agreement or TIC purchase agreement and read the arbitration section. The pending motion will decide whether claims like these stay in court. Your fund's name may also appear in the table above, which tells you whether it is one of the entities in the litigation.
• If you are considering an FNRP deal: ask for the private placement memorandum and the operating agreement of that specific fund, the loan terms (fixed or floating, and any rate cap), how the asset manager can be removed, and which affiliates are paid for construction, leasing and property management.
• Check the docket yourself: the case numbers are D.N.J. 3:25-cv-01119, 3:25-cv-13714 and 3:26-cv-08948 (PACER, or the free CourtListener mirror). The next event to watch is the ruling on the motion filed September 23, 2026. The free docket also lists a stipulation filed on October 2, 2026 in each of the three cases, and a stipulation and order entered on October 6, 2026 in No. 3:25-cv-13714; their text is not on the free docket and we have not read them, so we do not know whether they only move deadlines. As of October 11, 2026 the free docket of No. 3:25-cv-01119 also lists letters of September 28 and 29 (entries 77 and 78), a stipulation of October 2 (entry 79) and a text order of October 5, and no ruling on the September 23 motion. Re-checked on October 15, 2026, the docket of No. 3:26-cv-08948 also lists an order on October 13 (entry 7), and the other two dockets show nothing newer than October 6.

What Is First National Realty Partners?

FNRP is a vertically integrated commercial real estate firm that focuses on one asset type: grocery-anchored, necessity-based retail shopping centers.

The thesis is simple. Grocery stores hold up against e-commerce. Grocery-anchored centers, with a Whole Foods, Kroger, Publix, Aldi, Walmart, ShopRite or Harris Teeter as the anchor, draw steady foot traffic that supports the smaller tenants around them. That traffic has held up through recessions, the pandemic and rate cycles better than most other retail.

FNRP was founded in 2015 in Red Bank, New Jersey by Anthony Grosso and Christopher Palermo. Its first fund, First National Realty Partners Fund I LLC, filed a Form D on June 2, 2015. FNRP describes its leadership as including Jared Feldman (Executive Chairman), Andrew DeNardo (President), Kurt Padavano (COO) and Michael Hazinski (Chief Investment Officer), and the company and its affiliates are the defendants in the New Jersey investor suits. The firm says it handles acquisitions, asset management, property management, leasing and legal/accounting in-house.

What FNRP says it is doing now (company claims, not verified by us). In a release dated February 8, 2026, FNRP said it closed 2025 with "more than $200 million in capital markets transactions" and more than 1.5 million square feet of leasing across its grocery-anchored portfolio: 273,882 square feet of new leases and more than 1.26 million of renewals and extensions, with roughly 12 million square feet of grocery-anchored retail properties. It named the acquisition of Salisbury Marketplace in North Carolina, the sales of City Center Crossing in Georgia and Premier Center in Michigan, and the refinance of Brook Highland Plaza in Alabama. On March 9, 2026 it announced the purchase of Marc's Grocery Center, a 63,317-square-foot center in South Euclid, Ohio, which takes its Cleveland-area holdings past 600,000 square feet across five properties. No price was disclosed. The SEC filing behind it is the Marcs Center SC Realty Fund Form D of December 16, 2025 (see the table above), which is the fund's own offering notice, not a price. These are leasing and transaction figures, not investor returns: they say nothing about distributions or what investors in a given fund got back.

This differs from a marketplace like CrowdStreet, where FNRP would be one of many sponsors. When you invest with FNRP, you invest with FNRP directly, in properties FNRP finds, manages and eventually sells.

How FNRP Works: The Deal Structure

FNRP operates under SEC Regulation D, Rule 506(c), the exemption that allows private placements to accredited investors without SEC registration. Each deal is a special-purpose LLC or a tenant-in-common structure, and investors receive membership or TIC interests. FNRP's affiliates act as managing member and sponsor.

The equity waterfall:

FNRP uses an American-style waterfall:

1. Investors receive 100% of cash distributions until the preferred return hurdle (typically 8%)
2. After the hurdle, a GP catch-up provision applies
3. Above the catch-up, remaining cash flow is split between LP and GP at a deal-specific ratio

The specific GP/LP split above the hurdle is disclosed in each private placement memorandum, not published.

Deal selection criteria, as FNRP markets them:

• About 1 property selected per 1,000 reviewed
• 60+ qualification criteria
• Minimum deal size of about $15 million
• Minimum cap rate of about 6%
• Population of 100,000+ within a 5-mile radius
• Average household income above $65,000 in the trade area

Two investment types:

1. Individual property deals: direct investment in one grocery-anchored property. Higher concentration, no diversification.
2. Opportunity Fund: diversified exposure across several properties. FNRP Opportunity Fund 1, LLC filed a Form D/A on April 13, 2022 for a $50,000,000 offering.

Quarterly cash distributions are paid during the hold. Schedule K-1s are issued annually.

Minimum Investment and Accreditation

Minimum per deal: $50,000. All 28 Form Ds in the table above list a $50,000 minimum investment, and 27 of them add that the managing member may reduce it at its discretion. FNRP's 2015 and 2016 funds listed $10,000. Of the 19 Form D filings since January 2024, 18 list $50,000 and one, BV Cap Cana Realty Fund, lists $25,000.

Every deal requires a fresh $50,000 minimum. If you want two FNRP properties, you need $100,000.

Accredited investors only. You must meet at least one test:

• Net worth of $1 million+ (excluding primary residence)
• Annual income of $200,000+ (last two years and current)
• $300,000+ combined income if married

FNRP verifies accredited status before granting access to deal details.

How this compares:

FNRP sits at the institutional end of the crowdfunding spectrum. The $50,000 minimum filters for investors who can carry a 3 to 7 year illiquid hold.

Fee Structure

FNRP does not publish fees. They are disclosed in each private placement memorandum, which we have not seen. The rates below are third-party estimates of typical syndication fees; we could not tie any of them to an FNRP document, so treat them as unverified and ask for the PPM of the specific fund before investing:

What this means in practice: on a $50,000 investment over a 7-year hold, acquisition, management, disposition and promote fees together take a meaningful share of the gross return. FNRP states that the target and historical returns it publishes are net of fees.

The litigation raises a separate fee question. The investor complaints allege that FNRP affiliates collected fees beyond what the offering documents disclosed, including for construction and leasing, and that fees calculated on property value were inflated by overvaluation. FNRP denies this. No court has ruled on it.

Returns: Target vs. Reality

What FNRP advertises:

• Annual cash distributions: 6–9%
• Overall target IRR: 12–18%
• Preferred return hurdle: 8%
• Self-reported net IRR across the portfolio: about 14%

What can be independently verified: very little. FNRP does not publish deal-by-deal actual-versus-projected returns or full-cycle results in any public format, and the Form Ds carry no financial statements. The complaints allege that the 12% to 18% figure had no reasonable basis; that is their claim, not a finding.

What the public record does show about individual deals: the complaints' Summerdale Plaza example (bought for about $17.25 million and sold for about $15 million in early 2025, per the plaintiffs), the alleged Tropicana Centre price gap, and the allegation that some properties were placed into lender cash sweeps despite being nearly fully leased.

Our assessment: a 14% net IRR is plausible for grocery-anchored retail bought well, but it cannot be checked with public data. Treat advertised IRRs as targets, not results, until FNRP publishes full-cycle exits.

Pros and Cons

FNRP vs. Alternatives for Accredited CRE Investors

For a sponsor whose investor litigation has gone further (a certified class and a trial date), see our Cardone Capital review. For a lower-minimum marketplace alternative, see our EquityMultiple review.

Who Should (and Shouldn't) Use FNRP

FNRP may be appropriate if:

• You are accredited, with $50,000+ you can lock up for 3 to 7 years
• You want focused grocery-anchored exposure rather than a diversified platform
• You have read the specific deal's offering documents, ideally with a securities attorney
• You have asked FNRP directly about the litigation and are comfortable with the answer

Do not invest in FNRP if:

• You need liquidity within 5 years
• You are not a verified accredited investor
• You cannot get the specific deal's private placement memorandum
• You want a sponsor with a public, full-cycle track record

Our view: we would not add new money until the arbitration question is decided and the counterclaims are dismissed, settled or tested. The grocery-anchored thesis is real. But three open cases alleging RICO and securities fraud against the principals are a risk we would not take on a $50,000 illiquid minimum when cleaner options exist, such as an accredited multifamily fund like the Origin Investments IncomePlus Fund.

Sources, read on October 5-6, 11 and 15, 2026 (CourtListener RECAP docket listings re-checked on October 15, 2026, SEC EDGAR filing lists and full-text search of October 15, 2026, a Medalist Diversified REIT 8-K of August 11, 2025 and a FINRA BrokerCheck firm search of October 15, 2026; FNRP results as published in Pulse 2.0 releases of February 8 and March 9, 2026): U.S. District Court for the District of New Jersey, First National Realty Partners LLC et al. v. seven investor defendants, No. 3:25-cv-01119, Memorandum Opinion of June 5, 2025 (ECF 43), Memorandum Opinion of September 25, 2025 (ECF 69), Memorandum Order of March 26, 2026 (ECF 74) and Memorandum Order of August 27, 2026 (ECF 75), via govinfo.gov, and the case docket; the complaint in No. 3:25-cv-13714 (ECF 1, July 24, 2025) and its docket; the complaint in No. 3:26-cv-08948 (ECF 1, July 17, 2026) and its docket; the docket of E.D.N.Y. No. 2:25-cv-00780; the docket of D. Nev. No. 2:26-cv-00494 (dockets via the CourtListener RECAP archive); and the SEC Form D and Form D/A filings of the 28 funds listed above, of First National Realty Partners Fund I LLC, Fund II LLC and FNRP Opportunity Fund 1, LLC (accession numbers in the CSV). FNRP's marketing figures (target returns, deal criteria, leadership titles) are as FNRP publishes them and were not independently verified. Totals are our arithmetic. Lawsuit allegations are unproven and FNRP denies them. This is analysis of public documents, not investment, legal or tax advice.