A U.S. bankruptcy court judge approves the $ 126 million sale of The One, a Bel Air mega-mansion that was once scheduled to go public for $ 500 million, telling a story that has long captivated the Los Angeles real estate industry. I took it down.
At a hearing on Monday, Judge Deborah J. Salzmann of the US Bankruptcy Court said the sale “doesn’t feel like a success” but meets the legal criteria for approval. She said the purchase price was “within what other courts accepted as a fair and reasonable price.”
Fashion Nova CEO Richard Sagian, 2019.
Photo: Rich Fury / Getty Images
The ruling is the victory of Richard Sagyan, CEO of fashion Nova, a fast fashion giant who submitted a winning bid at an auction earlier this month.
“I am grateful to Judge Salzmann for approving my bid. I would like to work with the City of Los Angeles, the Bel Air Association, a new neighbor and the design team to complete and complete this iconic property. I’m looking forward to it, “says Saghian. E-mail statement.
Judge Salzmann approved the sale despite fierce opposition from some of the real estate’s major creditors, including multiple lenders of the property.
For some creditors, the price obtained at the auction ($ 126 million plus the buyer’s premium of the auction house, totaling about $ 141 million) far exceeds the true market value of real estate. Insisted that it was below and far exceeded previous offers and ratings. That number. Some have quoted a valuation of $ 228 million by 2019.
The property is plagued by construction issues, including leaks.
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The size of the house is about 105,000 square feet.
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Developer Nile Niami claimed it was the largest residential property in the city world.
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They claimed that the geopolitical events in Ukraine and the subsequent spillover in the international market reduced the final price, and that the auction was not operating properly. Some say that the auction house concierge auction confused buyers with various messages about how the sales process would take place, such as whether to set a reservation price on a house developed by Spec Home King Nile Nami. increase.
The judge required that the majority of the sale price be retained and not distributed until further agreement is reached between the creditors. Lenders include Don Hanky, known as the king of subprime mortgages, who have lent more than $ 100 million to the project. Other lenders for this property include Inferno Investment, which is associated with Canadian investors Julian and Lucian Remirado, and an entity managed by physician Joseph Engranov. At a two-day hearing, Hanky’s lawyer agreed with the approval of the sale, while Inferno’s lawyer and Engranov’s entity disagreed.
Prior to the hearing, Hanky told The Wall Street Journal that he believed the property was selling well and there was no guarantee that things would change if the sale was delayed.
“Wars can continue, interest rates rise, and inflation can hurt the economy, so it doesn’t make sense to stop selling for economic reasons,” he said, saying prices were too low. If so, he said other lenders may have stepped up to bid on real estate.
Nile Niami.
Photo: Dan Tuffs / Alamy
Engranov, who lent about $ 30 million to the project in a legal declaration asking the judge not to approve the sale, said he and Naiami’s ex-wife Yvonneniami personally took out at least one loan of the house. He said he guaranteed. He agreed that a reserve should be placed on the property. In a three-way call between Concierge CEO Chad Loffers and Niami, Engranov said Loffers seemed to be in favor of setting a reserve, which Engranov later said. Mr. Loffers advised the bankruptcy court that the best strategy was to have no reserves, saying he knew at another time. Neither Nami nor Engranov, who officially opposed the sale, responded to the request for comment.
Yvonne Niami, left. Don Hanky, that’s right.
Photo: From left: Charley Gallay / Getty Images; Apple Chiu / ZUMA Press
Englanoff also declared that the concierge had informed stakeholders that the auction would adopt a “soft gabelle” approach. This means that the auction can be extended for several days and bidders may have the opportunity to participate in the dispute after the scheduled end. It didn’t happen. This message from the concierge “almost certainly caused confusion among potential bidders,” Engranov said.
One was one of the most ambitious homes ever built in the early stages of construction. Originally, a jellyfish aquarium and a nightclub were planned.
Photo: David Paul Morris / Bloomberg News
Prior to the auction, there was a thorough debate about whether to set a reserved price on the house. Niami also asked the judge to prevent the sale. In her legal declaration, she gave the impression that not having a reservation price on the house allowed buyers to bid well below market prices, and Mr. Loffers dramatically oversold the potential for auctions. Real estate to sell for $ 265 to $ 310 million. As the auction unfolded and prices did not approach Mr. Loffers’ expectations, Niami sent a text message to Mr. Loffers in her declaration asking him to extend the auction, but the company had already announced the sale. I was releasing a release.
She wrote in these court documents, “The Concierge Auction is [the sale of] One of the most valuable assets in the United States, it deliberately misleads Lien owners … To generate promotion and improve the company’s status without the best interests of other parties. ”
Mr. Loffers said he believed that the property achieved fair market value and that there was no “single credible offer better than the final offer” before and after the auction. Regarding the Ukrainian war that influenced the sale, he said Russian buyers were not a major force in the trophy real estate market for many years.
“Many people (including me) will argue that it’s the best time to sell this property, as interest rates and geopolitical instability are gaining momentum,” he said. ..
Loffers told the journal that the reserve debate was indisputable. Because the reserve was below the final bid achieved at the auction. He said the quote to Mr. Niami was based on the idea that the property was completed and had a occupancy certificate, but neither occurred before the sale. “These two factors have proven to be significant headwinds in discussions with potential bidders,” he said. Nia Mi did not respond to the request for comment.
The contractor is currently one of the creditors in bankruptcy proceedings.
Photo: Douglas Friedman
Some debtors claimed that the property received interest from members of the Saudi royal family who were willing to pay $ 160 million prior to the auction. They also said that some Chinese buyers are willing to pay more than the auction price. Mr. Loffers said there was no credible offer. “Oral offers made to Escrow without a full-fledged deposit at the time the offer was presented are 101 against a danger signal as a fraudulent or fake offer,” he said.
The approximately 105,000-square-foot mega-mansion, spanning approximately 4 acres, includes 20 bedrooms, a garage of 30 cars, a boring ground, 5 swimming pools, a beauty salon, and suffers from construction problems such as leaks. increase. The Wall Street Journal reported. Not being able to obtain a certificate of residence means that it is illegal to live there and it will take a lot of effort for the new owner to obtain a certificate.
The rise and fall of The One is a good reflection of the decline from the grace of its developer and former king of mega-mansion, Niami. His goal was to build the largest and most impressive home in the city world in the last decade. Embarked on the sale of several major LA homes and planned to create The One in the mid-2010s, but construction was delayed and struggling to find a buyer to meet price expectations. So I wasted it and immediately rebelled against the lender. As his own unstable behavior. According to people familiar with the situation, he declined at least one official offer that exceeded the $ 126 million price.
Niami highlighted some alternatives on how to recover the money invested in the project. He even suggested creating a home-backed cryptocurrency to repay the debt, or even turning the home into an event space for pay-per-view boxing matches. Last week, Niami began an attempt to buy back The One in search of a new investor before the hearing.
Nami’s lawyer, Hamid Rafachu, said he and Niami would discuss the appeal.
“What happened here is wrong … see. [the value] Very difficult to get rid of in such an auction process [Mr. Niami,]Rafatjoo said at a hearing on Friday. “”[The price] Not enough to pay the secured creditors, not to mention getting money from my client who put $ 30 to $ 40 million in his money into this asset. “
Mr. Niami did not respond to the request for comment.
The purchaser of the contract was represented by Reini and Branden Williams of Beverly Hills Estate, and Stuart Veteric of Hilton & Highlands. Williams also processed the list with Aaron Carman of the compass.
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