Red River State Bank v. Generations on 1st, LLC (Watertown, SD Multifamily Loan-Default Litigation & Chapter 7 Sale)
A $22M+ loan-default fight between Red River State Bank and Fargo developer Jesse Craig over three Watertown, South Dakota apartment projects has spread across a South Dakota foreclosure court and a North Dakota bankruptcy court. On August 17, 2026, U.S. Bankruptcy Judge Shon Hastings authorized the Chapter 7 trustee to sell the downtown Ruins project to a backup bidder after Craig's own winning $11.265M credit bid collapsed over unresolved lien-priority issues, costing him more than $1.1M in forfeited earnest money.
Why it matters
Shows how a mid-size regional CRE loan default can splinter into parallel state foreclosure, federal removal/remand, and out-of-state bankruptcy proceedings that each move on independent timelines. Lenders and workout counsel should treat a Chapter 7 credit-bid win as provisional until the trustee's lien inventory is complete and title actually clears.
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