Marathon hearing leaves The One up in air
Bankruptcy judge again declines to issue ruling on megamansion’s $126M sale at auction
The fate of The One megamansion in Los Angeles’ Bel Air neighborhood remains unclear after a hearing on the recent auction of the bankrupt property stretched for more than four hours today.
U.S. Bankruptcy Court Judge Deborah Saltzman told attorneys for debtor Crestlloyd LLC and creditors in the case that no decision would be made on whether the $126 million sale of the 3.8 acre hilltop spread would go forward.
At the center of the debate was whether the auction, held earlier this month, locked down the best price and had been conducted fairly. Several parties contend the war in Ukraine and other factors interfered with the marketing behind the sale.
David Golubchik, an attorney for Crestlloyd, said that every conceivable step had been taken to ensure the best price was secured at a fair auction.
“There is a discussion of having more time, 30 to 60 days, “ Golubchik said. “But we haven’t received any more bids, and the loans are due at the end of this month.”
He also warned that waiting for a better price may have an opposite effect, drawing a lower bid.
Rayni Williams, who with her husband and business partner Branden Williams own The Beverly Hills Estates, told the court that she was not holding her breath for a superior bid. The Williamses represented the winning bidder, apparel entrepreneur Richard Saghian, founder of the Fashion Nova brand.
Rayni Williams testified in court, telling the judge that talk of conducting a new auction makes her “wary that we’d lose Mr. Saghian” as a bidder.
“It looks like failure to the open market when you have a failed escrow and you go back on the market,” Williams said. “You get less money.”
Hamid Rafatjoo, a lawyer for The One developer Nile Niami, told the court that it was crucial to hold out for a better bid. The war in Ukraine had scared off the billionaire developers to whom the property had been pitched, according to Rafatjoo. He also contended that some billionaires might have been put off by some unclear rules in auction.
“We’re not selling a tract home. We’re selling The One, which is one-of-a-kind,” Rafatjoo said. “When you are trying ram through the auction process, you are seeing the results, a bid that is a fraction of the value.”
Golubchik argued that the auction rules were clear.
The auction involved a “soft gavel”–or taking bids for about a week after official bidding stopped. Saghian was the last bidder, with his $126 million offer–and an additional $15 million to the auction service–made in the final minutes.
A 2019 appraisal had set the property’s value to around $350 million. The brokers had hoped for a record breaking deal of north of $239 million.
A final decision on the sale could come next week.
The auctioneer, Concierge Auctions, had boasted earlier this month that the sale was a record breaker. It’s a figure that shatters the record for a home sold at auction in the U.S.: The previous record, $63.1 million, was set last year by The Hearst Estate in Beverly Hills.