Investor Linked to Zions and Western Alliance Faces $270M Debt Crisis

A California real estate investor, Andrew Stupin, is facing significant legal challenges related to approximately $270 million in troubled debt. This situation has implications for both Zions Bancorp and Western Alliance, which recently disclosed losses attributed to bad loans linked to Stupin and his business dealings.

Court documents reveal that between April and August 2025, Stupin has been sued by Banc of California, Enterprise Bank & Trust, and Nano Banc to recover a total of $108 million in loans. Stupin, a long-time player in California’s real estate market, is named as a guarantor in these cases. Additionally, PMF CA REIT, another real estate investment firm, has pursued legal action against him for nearly $7 million.

Stupin’s attorney has publicly refuted the claims from Western Alliance, describing them as unfounded and misrepresentative. Representatives from the involved banks, including Enterprise, Nano, and Banc of California, declined to comment further. PMF’s legal counsel also chose not to provide additional remarks.

Impact on Regional Banks and Market Sentiment

The ongoing lawsuits have drawn attention to the unexpected losses reported by Zions and Western Alliance, which have unsettled investors already wary due to recent bankruptcies in the auto industry. The fallout has affected major financial institutions, including Jefferies and JPMorgan Chase, leading to comments from Jamie Dimon, CEO of JPMorgan, warning of potential “cockroaches” in bank portfolios, referring to hidden bad loans.

Regional banks like Zions and Western Alliance typically focus on specific local markets and often have greater exposure to commercial real estate, making them more vulnerable in times of financial strain. Analysts suggest that this environment might prompt bank boards to reassess their loan portfolios for similar issues. Manan Gosalia, a banking analyst at Morgan Stanley, noted that increased scrutiny is likely as financial institutions navigate these challenges.

Zions is scheduled to release its third-quarter results on October 23, 2025, which could provide further insights into its financial standing amidst these developments.

Legal Battles and Allegations

The recent selloff in regional banks has been exacerbated by Zions’ announcement that it is suing two Cantor Group funds to recover $60 million in defaulted loans. Western Alliance has initiated its own legal action against a separate Cantor Group fund, seeking nearly $100 million, alleging fraud on the part of the borrower. Both banks accused the Cantor Group of misrepresenting collateral associated with real estate loans, which has led to substantial financial exposure.

Stupin is named as a defendant in both lawsuits, alongside Gerald Marcil, another real estate developer. The allegations suggest that the Cantor Group engaged in deceptive practices, including the purported forgery of title insurance to obscure existing claims on pledged properties.

Stupin’s extensive involvement in the real estate sector includes being a significant investor in Continuum Analytics, which focuses on distressed real estate assets. Despite attempts to reach him for comment, Stupin has not responded to inquiries.

As regional banks navigate a challenging financial landscape, the outcomes of these legal disputes may have broader implications for investor confidence and the stability of the banking sector.