Bankruptcy court backs $141 million sale of LA Mega-Mansion

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(Bloomberg) – A bankruptcy court judge has approved the sale of a Los Angeles mega-mansion for $141 million, after objections that the price was not high enough to compensate creditors.

The 21-bedroom, 49-bathroom property in the Bel Air neighborhood, dubbed “The One,” has more than $250 million in debt.

The highest bid at an auction on March 3 was less than half the $295 million list price for the domain and a fraction of the $500 million once launched by its developer, whose l he company filed for bankruptcy last year when lenders decided to seize the decade. – the manufacturing project.

Deborah Saltzman, a judge in the US bankruptcy court case, said the sale should go ahead despite the disappointing price.

“It doesn’t look like a good result,” Saltzman said Monday. “It’s a justified result.”

Opponents of the sale had complained about the lack of a required minimum bid for the property and said the war in Ukraine had deterred offers from potential foreign buyers.

Brokers selling the property said the auction price was reasonable as potential bidders were deterred by the lack of an occupancy certificate and construction issues that had nothing to do with world events.

The highest bidder, Richard Saghian, founder of the Fashion Nova clothing line, argued that the court should accept his purchase because he followed the agreed process and had the means to pay. Saghian could walk away if the sale is delayed, his attorney Sam Newman said.

“He’s going to lose interest and move on,” Newman said during Friday’s hearing.

The project’s largest creditor, Don Hankey, with $132 million in claims, backed the sale. Putting the property back on the market was based on “hope, prayer and speculation” that someone would pay a higher price, Tom Geher, Hankey’s attorney, said Friday.

“That’s the real value of the property,” Geher said. “It’s not the developer’s imaginary value.”

One creditor who took issue was Joseph Englanoff, a Los Angeles doctor with around $20 million in claims. He argued that the auction failed to attract higher bids in part because global markets were rocked by Russia’s invasion of Ukraine. Potential buyers from the Middle East and Asia were among those who visited and expressed interest in the estate, but no one from overseas made an offer, Englanoff said in a filing on 15 march.

Lawyers for Inferno Investment Inc., a Canadian company with approximately $20 million in claims, cited a written offer from a Saudi royalty who was willing to pay $160 million, and “several potential buyers circling with higher numbers”.

Saltzman denied those claims, noting that no formal or approved bids had been submitted since the auction.

The mansion’s developer, Nile Niami, also chimed in, announcing a plan to raise up to $250 million from individual investors. This proposal was dropped when property managers banned potential investors from visiting the estate. His lawyer, Hamid Rafatjoo, argued that more could be done to secure a higher price.

“We are not selling land,” Rafatjoo said during Friday’s hearing. “There was a war and this war scared everyone.”

While he would like to get money from “The One”, Niami said he is now focusing on a new project, a reality TV network he will call “The One Truth”. He arrived for an interview last week at a Beverly Hills cafe in a chauffeur-driven white Rolls Royce Phantom, accompanied by his girlfriend, who was named Twiggy, and a bodyguard Niami calls Rhino.

“I’m not worried about The One,” Niami said. “I advance.”

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