As more apartment deals run into trouble, the issues at the 408-unit Cadence at Bluff Park in Hoover, Alabama, stand out.

In June 2021, entities related to Chamblee, Georgia-based apartment owner, manager and developer Audubon and Boca Raton, Florida-based investor Eastham Capital bought the property for $32.7 million in a deal that was covered by local news outlet AL.com.

However, that wouldn’t be the last time the Cadence at Bluff Park appeared in local news stories. Although local media had already raised concerns, the property's alleged problems came to light in a July lawsuit filed in Delaware’s Court of Chancery.

Eastham Capital Fund VI filed a lawsuit in July accusing Audubon founder and CEO Andrew Schwarz and his affiliates of badly mismanaging an apartment property in Alabama and breaching the terms of their agreement. 

As a limited partner, Eastham contributed $8.8 million to help buy Cadence at Bluff Park in March 2021. Over time, it made almost $3.8 million in additional capital contributions, bringing its total investment to almost $12.6 million, according to the lawsuit. 

Eastham claimed that the defendants could not achieve initial pro formas despite almost five years of owning the property and collecting nearly $1.4 million in fees. The filing also alleges that Schwarz and the Audubon entities racked up more than $104,000 in late fees for delinquent mortgage payments.

The plaintiff is asking for indemnification for “any and all losses, damages, and liabilities,’” according to the suit. “The Property was a disaster and was clearly not being professionally managed,” according to an email attributed to a former property employee in the court filing.

Here’s how the lawsuit outlines the series of events leading to the property's downfall. Audubon did not reply to emails from and could not be reached by phone by Multifamily Dive by publication time.

A series of failures

Sometimes buildings sink into water, and climate change isn’t always the culprit.

Ten units in one building at Cadence at Bluff Park were allegedly condemned because they were sinking into a nearby canal, according to court filings. 

But allegedly that was only the beginning of the problems. According to an email in the court filing, an anonymous former employee of Audubon claimed that units 813-815 were filled with sewage and water for six months, leading to the growth of mold and mushrooms. 

The culprit was “incompetent vendors who erroneously removed two support beams such that two buildings in the Property started sinking,” according to the anonymous emailer cited in court filings.

The former employee also claimed that smoke detectors and fire extinguishers “were not reinstalled after the renovations” in the second quarter of 2025 and “dozens of units with mold as well as other health hazards and safety concerns which were not addressed by management,” according to the suit. The maintenance team allegedly left the property because of a dispute.

In November 2023, the property drew local media attention again when it allegedly had no heat during a period when temperatures fell to around freezing, while one tenant claims management screened calls and was unresponsive, according to WBRC.

“It seems to be they’re screening phone calls and not responding to voicemails; I can’t get anyone to answer whatsoever,” resident Will Phares told the outlet.

In December 2025, WBRC reported that residents at the property went days without water, though a company spokesperson said the outage lasted only a day. 

“This pattern of gross negligence and damaging negative publicity severely tarnished the Property's reputation in the community, directly resulting in diminished resident retention and a substantial loss in occupancy,” Eastham said in the filing.

The origins of a deal gone bad

In March 2021, Eastham said Audubon Managing Partner and Chief Investment Officer Myles Cunningham reached out to the firm to propose investing in Cadence at Bluff Park. The projected internal rate of return was 23.53%, according to the lawsuit.

As the property suffered very public issues, Schwarz assured Eastham that he would get Cadence fully leased by June 2026. Instead, the filing claims the occupancy rate that month was 67.6%.

“We will go to 95% occupancy,” Schwarz allegedly said, according to the filing. “I will have Cadence fully leased by June 2026. I will do it.”

On another September 2025 call, he allegedly told the plaintiffs that he would be “much more involved moving forward” and said “something is just off at the Property and it might be us,” according to the court filing. At the time, he was also asking for more investment money.

In December 2025, Eastham agreed to give Schwarz additional chances to improve the property. In the December amendment to the limited partner agreement, he “personally guaranteed that he would make any future capital calls,” according to the lawsuit.

Eastham said the amendment included an acknowledgment that the defendants had “numerous defaults, gross negligence, and breaches of the standard of care” under the original agreement, according to the filing.

In that December amendment, Audubon was to meet certain collection and occupancy goals and pass a site visit before Eastham would advance additional funds. 

Among the issues allegedly noted by Eastham Capital CFO Anthony Librot during a Dec. 3, 2025, site visit were significant trash on the property grounds, HVAC units with missing covers and exposed electrical wiring, broken staircases, loose flooring, broken railings, damaged kitchen and bath countertops and failure to address issues previously flagged by the city of Hoover, according to the filing.

In a February letter, Schwarz said he was “unwilling to fund any additional shortfall contributions,” and that “additional capital contributions will not be made,” according to a court filing. On June 30, he received a notice that the property was in default and slated for a July foreclosure sale. 

“Despite having been provided with numerous chances to improve the financial performance of the project, Defendants badly mismanaged the project and flagrantly breached the terms of their agreements,” Eastham said in the suit.

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