FIVE-STAR DEVELOPMENT INITIATES CHAPTER 11 TO PROTECT THE RITZ-CARLTON PARADISE VALLEY AND ADVANCE COMPLETION OF THE PALMERAIE PROJECT

PARADISE VALLEY, Ariz. and SCOTTSDALE, Ariz., Nov. 4, 2025 /PRNewswire/ -- Five Star Development, LLC and affiliated entities (together, "Five Star" or the "Company"), including those developing The Palmeraie, today announced that it has filed voluntary petitions for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas.

The filing is intended to create a clear, court-supervised path toward completing The Ritz-Carlton Paradise Valley, The Palmeraie (the "Project")—a 122-acre master-planned resort, residential, and luxury retail destination. To ensure alignment across related assets and stakeholders, other Texas-based Five Star entities have also filed for Chapter 11 protection.

"This process provides the structure and transparency needed to bring the resort to completion and preserve the integrity of one of the most important developments in Arizona," said Gerald C. Ayoub, Founder and Principal of Five Star Development. "Our commitment to the Ritz-Carlton brand, our buyers, and our community remains unwavering."

Hotel construction is in its final phase, with substantially all infrastructure complete, and luxury interior finishes ready to begin once court approvals are finalized. Upon completion, The Ritz-Carlton, Paradise Valley, The Palmeraie will comprise a 215-room Ritz-Carlton resort, 80 branded Villas, 32 Estate Homes, and a 29-acre luxury retail and dining district.

Chapter 11 preserves Five Star's control over the Project and strengthens protection for stakeholders as the Company advances toward a full construction restart and completion of the resort. The automatic stay imposed by the filing will protect Five Star and its affiliated debtors from lender collection activity, including actions by the Company's secured lender, Madison Realty Capital. A Texas state court recently determined that Madison engaged in "acts of manipulation and fraud in breach of their duty of good faith and fair dealing" with respect to Five Star.

"This filing is about preserving the extraordinary progress already made and securing the Project's successful completion," said Lance Miller, Chief Restructuring Officer of Five Star Development and Managing Partner of Pivot Management Group. "Our priority is to position the company for a strong construction restart and deliver the world-class destination that the community has long anticipated."

Throughout this process, Five Star will continue normal operations across all Project sites and maintain full-service amenities for homeowners and residents without interruption.  Other Five Star debtors will operate in their ordinary course post Chapter 11 filings.

Five Star is represented by O'Melveny & Myers LLP as legal counsel and Pivot Management Group as Chief Restructuring Officer and restructuring advisor.

Additional information regarding the Chapter 11 filing, court documents, and claims process is available at https://cases.stretto.com/FStarSocorro.

About Five Star Development

Five Star Development is a leading commercial real estate developer with a nearly five-decade track record delivering transformative, high-value projects across the Southwest. Since 1978, the Company has developed, constructed, and managed more than 20 million square feet of residential, hospitality, retail, office, and industrial real estate, representing more than $3.5 billion in investment. Today, the Five Star's portfolio includes more than 7 million square feet of income-producing properties under active ownership and management.

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SOURCE Five Star Development