Accused slumlord Dara Daugherty files for bankruptcy, complicating the city’s plans

For a year and a half now, the city of St. Louis has been targeting the real estate empire of accused slumlord Dara Daugherty, seeking to have her properties declared nuisances. Just this week, Daugherty filed for bankruptcy.

Daugherty first came to the attention of the public in January 2024, when the city’s affirmative litigation unit filed a 57-page lawsuit against her and her associates, detailing what they called a predatory business that recruited “vulnerable and indigent” tenants from soup kitchens and homeless shelters to whom Daugherty and others rented rooms in houses that were not fit for human occupancy. The operation detailed in the lawsuit included 39 properties across a wide swath of South City, frustrating neighbors as they collectively received hundreds of ordinance violations and generated “an unreasonably high” number of calls to police.

Daugherty’s bankruptcy filing lists her as having a little less than $750,000 in assets, including a home in Brentwood, an LLC which owns some of the properties listed in the city’s lawsuit, as well as a company called K & D Home Repair LLC, which she co-owns with the father of her children. He owes her $400,000, the filing says.

She has around $5,900 in checking accounts, $20 in cash and a 1973 Chevy convertible valued at $10,000.

But against her $743,820 in assets, Daugherty has only $15,510 listed in liabilities. So why file for bankruptcy?

The reason has little to do with the city’s lawsuit against her and everything to do with the case of James Cole. 

Cole was living in one of Daugherty’s properties on Jefferson Avenue, paying her $500 a month, when another tenant stabbed him with a homemade spear. Two years later, Cole sued Daugherty and one of her LLCs, Sunshine Investments. Daugherty didn’t show up to court, and a judge awarded Cole $1.8 million.

Daugherty subsequently filed a motion to set aside the default judgment, but that was denied. Then Daugherty appealed. That appeal is still pending. 

“In the meantime, in order to fend us off, she has filed for bankruptcy, which, by federal law, puts the brakes on everything we’re doing,” says Cole’s attorney Ryan Gavin. 

William Ridings, who represents Daugherty in the bankruptcy filing, says the judgment in the Cole case was against Daugherty’s LLC as well as Daugherty personally. “They were foreclosing on her personal residence, so she filed the bankruptcy. So I have to go in front of the judge and explain that this judgment should only be against the LLC,” he says. 

The city’s lawsuit against Daugherty was not a particularly novel use of nuisance laws, as neighborhood groups have been suing derelict property owners for some time now, seeking to force them to clean up or sell their holdings. But it was novel in the sense that the city was the one bringing the lawsuit, using its new Affirmative Litigation Unit operated out of the City Counselor’s Office. That office is essentially the in-house law firm for the city, and generally its lawyers defend the city in court. The idea behind the Affirmative Litigation Unit was to go on offense to fix problems in the city, like nuisance properties undermining neighbors’ quality of life.

In the year and a half since that suit was filed, Daugherty has divested herself of at least one property, a historic house on Virginia Avenue in Tower Grove East. Even so, there was skepticism that she truly rid herself of the property after it came to light that she had previous connections to the man she purportedly sold it to, Patrick Timmerman. The house changed hands again late last year and, according to city records, now belongs to yet another owner. One neighbor tells SLM that a crew of goons came not long ago and lifted everything of historical value from the property. “It’s just a depressing shell.”

There is also reason to think that, despite the property having twice changed hands on paper, Daugherty might still be involved with it. The neighbor tells SLM that Daugherty recently dropped off two men to cut the property’s grass. “Odd behavior for a ‘former’ property owner,” the neighbor says. 

She adds that she recognized one of the men from a strange interaction she had with him previously in the neighborhood in which he was impersonating a firefighter volunteering to cut grass. (In a similar vein, the city’s lawsuit alleges that Daugherty used tenants pretending to be building inspectors to evict other tenants.) 

The city’s lawsuit against Daugherty remains pending, and Gavin says that, though he’s not directly involved in the suit, he doesn’t think it will be impacted by the bankruptcy filing in the way the Cole case has been. “To the extent the city of St Louis isn’t trying to collect money from her and just trying to stop her from misbehaving, I think that they are probably going to be able to proceed with their lawsuit,” he says.

The courthouse scuttle around the Daugherty suit has long been that the city is trying to get Daugherty to sell her properties to someone who will be a responsible steward. But, with the $1.8 million judgment hanging over her head, it stood to reason that Daugherty wasn’t exactly a motivated seller: Any money she earned by selling could wind up going to Cole. It’s unclear how a bankruptcy filing affects that dynamic, too. 

Ridings, the bankruptcy attorney, says that Daugherty indicated to him that she blames fentanyl abuse in the city for the slew of police calls to her properties.

“I’ve advised her to get out of owning any properties in the city, because it’s beyond her capacity,” he says. 

In the span of about 18 months, police were called 56 times to a California Avenue property owned by a Daugherty-affiliated LLC. Daugherty told police she herself was injured at the property by a tenant during a rent dispute. This all occurred in a period during which the property was condemned for occupancy, illegal to live in much less rent out. 

Says Ridings: “The city’s out of control.”

Hear more about this story from Ryan Krull on The 314 Podcast.