Dallas builder shutting down, laying off 150+ as bankruptcy, misconduct allegations roil owners

About 150 employees of a Dallas-based specialty construction company appear to be collateral damage in a legal battle between an out-of-state private equity firm declaring bankruptcy and its founders accused of financial misconduct. 

In a WARN notice dated May 19, Auzmet Architectural notified the state that it would be laying off 152 workers at its 1444 North Cockrell Hill Road headquarters. Most would be separated from employment immediately, with a select few assisting with wind-down until mid-July, the notice said. Auzmet designs and builds custom facades for buildings and has provided services at Dallas’ First Baptist Church, Atelier Flora Lofts, Ross Tower and more. The company has several ongoing projects in the city, notably Uptown’s under-construction Bank of America Tower at Parkside, and it is unclear what will happen to those projects.

On May 22, Auzmet, alongside owners Illinois Avenue Partners and a host of IAP’s other subsidiaries, filed for Chapter 7 bankruptcy. A few months ago, IAP sued departed founders Richard Gifford and Michael Winton alleging a “pervasive scheme of financial misconduct, manipulation of IAP’s books and records, self-dealing, and concealment of company liabilities and financial status.”

“The magnitude of Winton and Gifford’s malfeasance is substantial and has been debilitating to the Company,” reads the complaint, filed in Delaware Chancery Court in January. 

Winton and Gifford founded IAP, headquartered in Philadelphia, around 2018, and the firm initially targeted small custom signage companies and other commercial real estate contractors, according to the complaint. IAP then acquired Auzmet in 2021, its first major acquisition and the largest company in IAP’s portfolio by far, seeking outside investment to do so. The lawsuit then alleges that though the revenue of IAP’s portfolio companies couldn’t support additional acquisitions, the pair continued to seek outside investment and debt financing to acquire more companies while representing to IAP’s board and lenders that its portfolio companies’ financials were strong. 

Winton and Gifford then approached the board multiple time for cash infusions, citing cash shortfall emergencies, unexpected due to IAP’s purportedly strong financials, the lawsuit says. They also allegedly took out two loans totaling more than $1 million to fix cash problems and make payroll that they never disclosed to the board.

The board sought additional financial oversight, but this prompted Winton and Gifford to present manipulated financial information more often, the complaint alleges. Manipulation occurred primarily by recognizing revenue well before it actually materialized and associated costs were incurred by not entering negative revenue calculations into financial documents, per the complaint. For example, in 2024, they presented 2024 earnings before interest, taxes, depreciation and amortization as $5.5 million, when accounting for the manipulation and undisclosed liabilities, it was actually a multimillion-dollar loss. 

Further, the suit alleges, Winton and Gifford used these inflated revenue metrics to increase their salaries and bonuses, in addition to other methods of improper enrichment. 

These transgressions were discovered when, as part of the increased oversight, IAP’s board directed Gifford to reduce costs and eliminate redundant positions at Auzmet. It also sought recommendations from now CEO of IAP Bob McNally on how to improve cash flow issues. Instead of following these directives, in May 2025, Gifford unilaterally, and without cause, demoted Auzmet CEO and founder Jesse Ross to a sales-only position, elevating a man Gifford knew was recently accused of workplace sexual harassment in Ross’ place, the complaint alleges. The board was not informed of this move or of the harassment claim against the new CEO.

In June upon discovery of Gifford’s actions related to Auzmet, the board terminated him as CEO for insubordination and Winton was stripped of his co-president title, the complaint says. McNally was appointed CEO of IAP, and whistleblowers within Auzmet informed him of their financial misconduct. After an internal investigation, Winton and Gifford were fired for cause in August. The board also bought back their equity in the company worth $0 due to profit-related contract stipulations.

“The Court should declare that Winton and Gifford’s conduct, as described herein, constituted bad faith, were not in the best interest of the Company, and constituted fraud, gross negligence, and/or willful misconduct,” the complaint asks. Ryan Winton is also named in the lawsuit for allegedly aiding and abetting Gifford and Michael Winton’s acts. 

Meanwhile, the defendants have sought a motion to dismiss the lawsuit and countersued in February for indemnification. Court documents claim Winton and Gifford were initially demoted without cause, and then terminated on “trumped up charges,” per court documents, with the company “refusing to pay Gifford and Winton what they were rightfully owed.” 

IAP’s complaint alleges that once the improper accounting practices were accounted for in an analysis last fall, it was discovered that IAP was on an unsustainable path, with costs outpacing revenue. In its bankruptcy filing, IAP estimated that it had less than $50,000 in assets and between $10 million and $50 million in liabilities.

Meanwhile, Ross resigned from Auzmet in April, which he announced in a social media post. While he declined to comment on the closure of the company as it related to IAP, he addressed the layoffs.

“My focus has been on the almost 200 people who have been left without a career with no warning and assisting/supporting finding new homes for them. I must commend the broader professional Texas community and businesses across the nation which those business leaders who have reached out to me personally and taken a large portion of the team already,” he wrote. “I’ll continue to support and advocate for the incredible people that made up that team (not the private equity group) and 11 years of my life.”

A lawyer for IAP declined to comment, while lawyers for Winton and Gifford did not respond.