Chicago-based property management firm CKO Real Estate is reportedly facing $20 million in debt, while its CEO, Chikoo Patel, is being sued for personal unpaid bills. The company's financial collapse follows numerous reports of tenants living in uninhabitable conditions and the subsequent shutdown of several of its South Shore apartment buildings.
Even after CKO Real Estate ceased operations, some former tenants are now dealing with eviction proceedings from new management companies, despite their ongoing efforts to resolve severe maintenance issues in their homes.
Key Takeaways
- CKO Real Estate has accumulated approximately $20 million in debt and is involved in multiple lawsuits.
- CEO Chikoo Patel is personally being sued by American Express for an alleged unpaid bill of $63,000.
- Old National Bank is suing Patel and an investor for $16 million related to a separate property deal.
- Former tenants who lived in buildings managed by CKO are now facing eviction notices from new property managers.
- Four large apartment buildings in South Shore previously managed by the firm were shut down by the city and remain vacant.
Firm's Financial Disintegration
CKO Real Estate, which once managed 34 apartment buildings across Chicago, is now facing significant financial and legal challenges. According to real estate news outlet The Real Deal, the firm's total debt has reached $20 million, accompanied by broken contracts and unpaid vendors.
One of the most significant legal actions is a $16 million lawsuit filed by Old National Bank. This suit targets CEO Chikoo Patel and investor Shai Wolkowicki over a distressed multi-family property transaction in Springfield, Illinois. Wolkowicki was an investor in several of the South Shore buildings that CKO managed.
The company's problems extend to its internal operations. In February, investors alleged that Patel had stolen $4 million, which coincided with the firm reportedly closing. Former employees stated they were laid off during the same period after not receiving pay for several weeks. Additionally, a maintenance and cleaning vendor claims it is owed at least $140,000 for services rendered.
Background on CKO's Portfolio
At its peak, CKO Real Estate was a major property manager in Chicago's South Shore neighborhood, overseeing 26 buildings in that area alone. The rapid unraveling of the firm has left a significant impact on both the local housing market and the residents of these properties.
Legal Troubles Mount for CEO
Beyond the company's corporate liabilities, CEO Chikoo Patel is facing personal legal battles. American Express filed a lawsuit in Cook County court alleging that Patel failed to make a minimum payment on a $63,000 bill during the summer.
This lawsuit is part of a series of legal actions from various lenders targeting the embattled landlord. While legal documents outline specific debts, unverified reports from sources cited by the Chicago Crusader claim Patel has been seen driving several luxury vehicles, including two Range Rovers and two convertible Mercedes-Benz cars. Ownership of these vehicles has not been confirmed.
Key Financial Figures
- $20 million: Total reported debt of CKO Real Estate.
- $16 million: Amount sought in a lawsuit by Old National Bank.
- $4 million: Amount investors alleged Patel stole from the firm.
- $140,000: Unpaid balance claimed by a maintenance and cleaning firm.
- $63,000: Alleged unpaid personal bill leading to a lawsuit from American Express.
Tenants Face Unlivable Conditions and Eviction
The financial collapse of CKO Real Estate occurred against a backdrop of severe tenant complaints. For months, residents in CKO-managed buildings reported living with no heat, no water, and in some instances, no electricity. The conditions became so poor that the City of Chicago intervened.
Earlier this year, city officials shut down four large apartment buildings on Paxton Avenue in South Shore due to safety and health violations. Those buildings, once home to numerous families, are now boarded up and vacant. Displaced tenants were offered $2,500 in assistance.
In response to the persistent issues, tenants organized with the help of Southside Together to form a union. They held protests and meetings with city officials, including Alderman Desmon Yancy (5th) and Mayor Brandon Johnson, to demand annual inspections, compensation for out-of-pocket repairs, and forgiveness of back rent. However, many tenants reported that their demands were largely unmet, leading some to withdraw from the union out of disillusionment.
"Tenants demanded annual inspections, compensation and back rent forgiven after some spent their own money on unaddressed repairs."
New Management, Same Problems
After CKO's departure, management of the South Shore properties was transferred to firms including Halsted Taylor and PIP Realty. Despite the change, tenants say that problems with mold, water damage, and infestations have continued.
The situation has escalated for some of the most vocal tenant leaders. In August, Russell Carter and Chynel Cooper, two former CKO tenants, received eviction notices from Halsted Taylor. Carter had been a prominent voice in the tenant union, documenting issues in his apartment that included a collapsing ceiling, water leaking from walls, and a severe rodent problem. Cooper had previously filed a lawsuit alleging retaliation for complaining about similar issues.
These eviction proceedings highlight the ongoing instability for residents who have already endured months of difficult living conditions, even as the company originally responsible for the properties navigates its financial and legal collapse.
