JZ Investments, Inc. v. Chen Ji, Belpointe Prep LLC, Belpointe Prep OC LLC and BPOZ Storrs Holding, LLC

Full write-up

A Connecticut investor's lawsuit over a stalled 262-unit housing development next to the University of Connecticut's main campus illustrates a recurring risk in joint-venture real estate deals funded partly through foreign investor capital: what happens when the managing partner who controls the paperwork turns out, the other side alleges, not to be trustworthy with it.

JZ Investments, Inc., a Connecticut corporation, filed a complaint on April 24, 2026 in Connecticut Superior Court in Stamford against Chen Ji, who managed a real estate joint venture with JZ, and against three affiliated entities of Belpointe PREP, LLC, a publicly reporting qualified opportunity fund that develops multifamily and mixed-use projects: Belpointe Prep LLC, Belpointe Prep OC LLC, and BPOZ Storrs Holding, LLC. JZ brought the suit both individually and derivatively on behalf of CMC Storrs SPV, LLC, the entity that owns roughly 60 acres at 497-501 Middle Turnpike in Mansfield, Connecticut, the site of the planned project immediately adjacent to UConn's Storrs campus.

According to Belpointe's own SEC disclosures and reporting by the Hartford Business Journal and Law360, JZ says it invested approximately $1.6 million in the venture and held a preferred equity interest of nearly 30% in CMC Storrs SPV. JZ's complaint alleges that Chen, over a period of years, misappropriated funds tied to the EB-5 immigrant investor program connected to the project, and that in 2023 Chen signed a settlement agreement, without JZ's authorization, that had the effect of stripping JZ of its ownership interest and leaving Belpointe as CMC's sole owner. Against Chen individually, the complaint alleges fraud, breach of fiduciary duty, and forgery. Against the Belpointe entities, it alleges negligence, fraudulent transfer, unjust enrichment, and violations of the Connecticut Unfair Trade Practices Act, arguing Belpointe benefited from a settlement it knew or should have known was unauthorized.

Belpointe disputes any liability in its SEC filings and states it intends to vigorously defend the litigation; an attorney representing the Belpointe defendants told the Hartford Business Journal that his clients deny the allegations, are not responsible for Chen's conduct, and have separately sued Chen themselves. As of Belpointe's quarterly disclosure filed November 4, 2026, the parties were still litigating preliminary motions, with Belpointe awaiting a hearing date on its motion to dismiss. The Storrs dispute is not Chen's only entanglement with Belpointe in litigation: the company's filings also disclose a separate, earlier-filed suit by the Galinn Fund LLC seeking to foreclose on a $3 million mortgage note Chen executed on CMC's behalf, as well as a 2025 derivative suit against Chen that was dismissed in February 2026.

For a development that has already sat stalled for years while these disputes played out, the litigation is a reminder that institutional and individual investors underwriting joint ventures with foreign-capital components need more than a trusted relationship with the managing partner; they need independent, contractual visibility into that partner's authority to sign settlements and amendments on the venture's behalf, and sponsors that take in minority investors alongside a managing partner should expect to be drawn into the fallout if that partner's conduct is later challenged, however clearly the sponsor tries to disclaim responsibility for it.

Case timeline