Judge approves emergency loan to fix erosion at bankrupt Mohamed Hadid property

364 Capital LLC, a Naples, Florida-based firm specializing in bankruptcy restructuring and DIP financing run by Renzo Renzi, has offered a $1.1 million loan to a Hadid-controlled entity called Tree Lane LLC to help address slope erosion issues and engage professionals to help Hadid through bankruptcy on his Beverly Hills property. 

Hadid filed for bankruptcy in April on a lot located at 2451 Summitridge Drive, a four-acre vacant lot that needed “emergency” attention, due to erosion issues. The spec developer owed $54.6 million to creditors, according to the bankruptcy filing. The entity’s interest in the property is worth about $35 million, the filing said. 

U.S. Bankruptcy Court Judge Sheri Bluebond approved the loan on May 29, which will serve as interim emergency financing, according to a court order. Renzi declined to comment, while Hadid could not be reached for comment. 

The loan has a floating interest rate equal to secured overnight financing rate plus 9 percent. As of June 4, SOFR was at 5.3 percent, meaning the interest rate is currently at around 14 percent, according to a source familiar with the transaction.

The debtor-in-possession financing, which is a type of loan given to companies under Chapter 11 bankruptcy protection, will go towards paying for contractor and engineering services to address erosion at the site. 

Hadid originally sought a total of $7.7 million in DIP financing, according to the court document.The court will consider approval of the remaining balance of the financing at a hearing on June 13.

Renzi’s 364 Capital has previously stepped in with similar financing for Hadid’s other properties. 

In 2022, the firm provided a $6.5 million loan for a Hadid-associated entity called Treetop Development LLC, also to help fix erosion issues at another Beverly Hills property at 9650 Cedarbrook Drive in Beverly Hills.

Hadid has blamed the lender on the property for his financial difficulties, according to a recent interview with the New York Post.

“They gave us enough money to hang ourselves and then they stopped funding,” Hadid told the Post, referring to real estate developer Zach Vella and his firm Skylark Capital, which provided a $31 million loan to his Tree Lane LLC in 2018. 

“I believe I was a victim and now I have to fight my fight,” he said.