Torrey Point. Before Tsunami ever occupied the space, it was evicted for breach of contract.

Do fat cats do their homework when plunking a bundle of money into start-up tech companies?

Alex Hern: "We will probably end up occupying the building.”

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Wealthy investors are putting big bucks behind a Del Mar company, Tsunami VR, which plans to develop virtual reality applications for business communications. The cofounder and longtime venture capitalist is Alexander Hern, who lives in a posh oceanfront home in Encinitas and drives luxury cars.

In September of last year, Tsunami signed up to be the first tenant in a newly developed Torrey Point office in Carmel Valley. But before Tsunami ever occupied the space, it was evicted for breach of contract.

Ernest Rady. His American Assets Trust sued Tsunami for $22.8 million.

The building’s owner, San Diego’s American Assets Trust (controlled by billionaire philanthropist Ernest Rady) sued Tsunami in superior court, stating that Tsunami had agreed to pay rent for 120 months, didn’t pay, and never occupied the building. The trust demanded $22.8 million.

“We’re in the middle of settlement discussions with those guys. We will probably end up occupying the building,” says Hern.

Steve Schklair: “Alex made an offer and paraded me around investor meetings."

Although the suit has been settled, Tsunami will not occupy the building, says the trust’s attorney, Adam Wyll. “We have just moved on,” he says.

Hern filed for Chapter 7 (liquidation) bankruptcy in 2012. “I withdrew that filing and it was dismissed,” claims Hern.

“There is no such thing as withdrawing a filing in a Chapter 7,” says the trustee, Ronald Stadtmueller. The debtor must ask the court to dismiss it. It was Stadtmueller who filed a motion to dismiss the case, because Hern didn’t show up at a creditors’ meeting. Then, according to a bankruptcy court filing, Stadtmueller sued Hern for missing the meeting and making “false oaths or accounts by omitting and/or misrepresenting information in his [bankruptcy] petition.” Hern, “with intent to hinder, delay, or defraud a creditor or an officer of the estate… concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information,” said the filing.

A spokesman for Hern insisted that Hern really did end the bankruptcy himself by not attending the meeting and not turning over records. The spokesman says Hern filed Chapter 7 initially because he was facing possible large liability in a lawsuit. Later, according to this account, he learned the lawsuit would be dismissed, so he, in effect, ended the bankruptcy.

Frankly, this is a whopper. Hern’s bankruptcy lawyer was in the process of withdrawing from the case when it got dismissed. The lawyer said in her declaration to the court that Hern “has failed to cooperate with counsel in responding to document requests” and wouldn’t say why he didn’t show up for meetings. Indeed, at one crucial point, Hern became “completely incommunicado,” wrote the attorney.

Early in the century, Hern and some of his friends formed a fund to incubate start-ups. It went through several name changes and was finally called Silicon Valley Innovation Company, LLC.

Christian Jagodzinski, a multimillionaire German software developer who is now a real estate mogul in Miami Beach, invested $1 million in the so-called incubator. In 2004, the company stopped providing reports to stockholders, and Jagodzinski could not get any information from the company.

In 2011, he went to court to demand books and records. Bram Portnoy was appointed receiver. “According to both Jagodzinski and Portnoy, the books and records investigation resulted in the discovery of ‘widespread self-dealing and corporate looting,’” according to a Delaware Court of Chancery judge. At the end, the firm had barely any assets and only one employee — a close buddy of Hern’s.

“That is all done, wrapped up,” insists Hern. The charges of self-dealing and looting were “disproven…all untrue.”

The charges “weren’t disproven,” says Portnoy. Suits were filed against several company officials, who were slapped with judgments. No suit was filed against Hern because “we felt or we had heard that he was ready to file bankruptcy and there were other judgments against him that had not been collected. We didn’t even have his address.” After they found him, Hern “offered to cooperate with us” and testified against the others.

“To my knowledge, nothing was disproven,” says Jagodzinski. Hern and his confreres milked the company, “to the detriment of shareholders,” he says. “Out of the $80 million invested by the people that put the capital in, including me, we got zero money out.”

In 2008, Mohsen Afrasiabi filed suit against Silicon Valley Innovation Company and Hern in Santa Clara, saying that Hern had promised him a 7-percent share of one start-up and 300,000 shares of another. Hern had breached those agreements, charged Afrasiabi.

“It was a frivolous claim,” asserts a Tsunami spokesman. But according to a statement by Hern’s former bankruptcy counsel, Hern filed the 2012 Chapter 7 bankruptcy as a result of the Afrasiabi suit.

Steve Schklair of Los Angeles–based 3ality Technica had put his software company up for sale. “Alex made an offer and paraded me around [investor meetings] saying, ‘We have this asset.’” Then, “I paid a logo designer to redesign the image.” But Hern “just disappeared, didn’t honor signed deals, didn’t meet contingencies. I shot a demo for him. He promised to pay and never did.” But Schklair probably won’t sue because he, too, doubts Hern has any money.

“We made a business decision,” says Hern. But after signing papers and promising to pay, can you blame a breakup simply on a “business decision?”

Glenn Karp, who brokered the Torrey Point lease, on May 30 sued Hern in superior court for fraud, failure to pay money owed, and other transgressions. He says he is owed more than $400,000. In turn, both Tsunami and American Assets Trust claim Karp fraudulently took money from both sides. He says his procedure was legal.

Hern has been sued for nonpayment by Wachovia Bank, two weight loss firms, a Tampa investor (twice), and a widow whose house he rented in prestigious Los Altos Hills. The widow, Merel Glaubiger, called me from Paris to confirm that Hern never paid a dime, and she will step up pursuit of him when she returns to the U.S. in July.

I talked with some former employees. They said that Hern was perpetually late meeting payroll and sometimes failed to pay. They agreed that Hern is gentle one day, volcanic the next. Hern drives Rolls-Royces and Porsches to work. That does not sit well with employees who have not been paid.

When I began asking Hern about that, he said he had to catch a plane and hung up.