A Los Angeles mega-mansion was sold for $141 million amid protests that the price wasn't high enough to satisfy creditors. The bankruptcy court judge accepted the sale.
The One, a 21-bedroom, 49-bathroom building in the Bel Air neighborhood, owes more than $250 million in debts.
The highest bid made at an auction on March 3 was less than half the estate's $295 million list price and a small portion of the $500 million originally proposed by its developer, whose company declared bankruptcy last year as lenders prepared to foreclose on the decade-long project.
The sale should go on despite the underwhelming price, according to Deborah Saltzman, the judge in the U.S. Bankruptcy Court case.
Saltzman remarked on Monday, "It doesn't feel like a nice result. "The outcome is reasonable."
The lack of a minimum needed bid for the property was criticized by those opposed to the sale, and they claimed that the conflict in Ukraine had discouraged offers from possible foreign bidders.
The brokers who are selling the property claimed that the auction price was fair because no certificate of occupancy was present, and because there were construction issues that had nothing to do with world events.
Richard Saghian, the founder of the clothing label Fashion Nova and the highest bidder, contended that the court should recognize his acquisition because he adhered to the established procedure and had the money to pay for it.
In a statement sent through email, Saghian expressed his gratitude to Judge Saltzman for approving his decision. To complete and polish this famous property, I look forward to working with the city of Los Angeles, the Bel-Air Association, my new neighbors, and my design team.
Don Hankey, who had claims totaling $132 million and was the project's largest creditor, backed the transaction. According to Tom Geher, Hankey's attorney, relisting the house on the market was done in the "hope, prayer, and speculation" that someone would offer a greater sum.
Geher stated, "This is the true value of the property. "It's not the developer's make-believe, fairy tale value."
Joseph Englanoff, a Los Angeles psychiatrist with roughly $20 million in claims, was one creditor who objected. He claimed that part of the reason the auction failed to draw bigger offers was that the Russian invasion of Ukraine shook up the world markets. No foreigners made an offer on the estate even though prospective purchasers from the Middle East and Asia visited and indicated an interest in it, according to Englanoff in a court document filed on March 15.
Lawyers for Canadian company Inferno Investment Inc., which has $20 million or more in claims, alleged a written offer from a Saudi monarch who was prepared to pay $160 million as well as "many possible bidders circling with larger numbers."
Saltzman denied the assertions, pointing out that after the auction, no official or accepted offers had been made.
Nile Niami, the mansion's developer, also joined the fray and declared a desire to raise as much as $250 million from private investors. When the property's managers forbade prospective investors from viewing the estate, that proposition was abandoned. Hamid Rafatjoo, his attorney, suggested that more could be done to obtain a greater price.
During the hearing on Friday, Rafatjoo stated, "We're not selling a tract home. Everyone was terrified by the war that occurred.
Niami stated that he is currently concentrating on a new project, a reality television network he would call "The One Truth," even though he would like to get funding from "The One." Last Monday, he showed up for an interview at a Beverly Hills cafe in a chauffeured white Rolls Royce Phantom together with his girlfriend, Twiggy, and a bodyguard Niami refers to as Rhino.
Niami declared, "I'm not worried about The One. I'm going ahead.