The foreclosure auction for Nile Niami’s infamous spec project “The One” was delayed this week after Joseph Englanoff accused fellow lender Don Hankey of trying to leverage outstanding loans into control of the property.
Niami’s behemoth in Bel Air was set to hit the auction block on Wednesday, but a Los Angeles County Superior Court judge delayed it until later this month, according to the L.A. Times.
The dispute between Englanoff and Hankey is over which of the lenders should be paid out first when the property sells either at auction or on the market.
Englanoff provided Niami with a loan of roughly $30 million for the project in 2018–and Hankey lent an additional sum. Englanoff said he should be paid back before Hankey’s loans are paid.
Englanoff alleged that Hankey previously agreed to complete the unfinished, 105,000-square-foot home and sell it for $225 million via brokers on the market, not through an auction.
A sale at that price would repay all debts on the property and net Niami some profits, Englanoff wrote in a court declaration.
Englanoff said that Hankey would claim at the auction that he’s owed more money than he is really due, discouraging other bidders and allowing him to take control of the property through a credit bid. That would leave no money to pay other lenders.
A credit bid is based on the debt owed to the bidder, so it doesn’t require Hankey to put up any cash.
Hankey said that he tried to reach an agreement with Englanoff but “never came to terms.” His lawyers said in court papers that there is nothing stopping Englanoff’s company, Yogi Securities Holdings, from bidding on the property at auction.
Hankey has been busy elsewhere lately — he paid $30 million for a mansion in South Florida.
[LAT] — Dennis Lynch