Former owner accused of refusing to leave foreclosed Hamptons mansion
“I’m going to solve all your problems,” Mark Gallagher allegedly told one lender. “I got this, bro. Stay focused.”
A listing for a newly built Southampton home boasts of “dramatic floor-to-ceiling windows” and “park-like grounds” with lush landscaping just a block from the ocean.
What the $13.4 million listing doesn’t mention: The owner’s equity interest was wiped away in a foreclosure in February, and now his lender wants permission to kick him out and sell the home in a bankruptcy auction.
The lender, an entity apparently tied to Miami-based distressed investor Lakeport Capital, claims that one of the home’s former owners, Mark Gallagher, is trespassing by continuing to live there after the foreclosure.
The 10,000-square-foot Cape Cod-style home at 145 Wickapogue Road, which is actively listed with NestSeekers, has been thrust into the convoluted world of bankruptcy, adding to Gallagher’s growing legal battles surrounding the shiny new mansion.
In February 2020, hard-money lender 5 Arch Funding Corp provided Gallagher with $5.8 million in financing for the project, consisting of a $3.3 million senior loan and a $2.5 million building loan. The consolidated loan was personally guaranteed by Gallagher and his wife, Nicole, filings assert.
The next year, creditors and lenders began coming after the couple.
Unlike a traditional foreclosure, a UCC foreclosure allows the lender to skip the court process and instead schedule an auction for the equity interests in a property.
On February 17, Blue Sky won the auction with a credit bid using its existing debt. As a result, it took over the equity interests in the LLC that owned the home. Greg Corbin, a bankruptcy specialist at Rosewood Realty Group, marketed the sale, while Matthew Mannion of Mannion Auctions was auctioneer.
Late last month, the new owner filed for bankruptcy, allowing the LLC to restructure, and hired bankruptcy specialist David Goldwasser as the restructuring officer.
The bankruptcy petition lists Jean-Marc Orlando, founder of Lakeport, as the sole owner of the debtor entity. The petition claims the property has $12.3 million in liens, which is close to its value.
In a separate lawsuit in federal court, Mark Gallagher is seeking a temporary restraining order to stop the new owner from removing him from the property. His attorney alleges the interest rate used for the secured loan is higher than 25 percent and criminally usurious.
Gallagher’s attorney did not return a request for comment.
His attempted ousting from the Southampton home is not only the legal dispute Gallagher has faced with lenders over the last few years.
Another plaintiff, Guy Liebstein, is suing Gallagher over claims that he loaned him $450,000 toward other properties, but instead of getting paid back when the properties sold, Gallagher bought more properties, including the Southhampton home.
When Liebstein texted Gallagher to ask about the debt, Liebstein said Gallagher responded with assurances he would be repaid.
“I’m going to solve all your problems,” Gallagher allegedly told him. “I got this, bro. Stay focused.”