Documents in a bankruptcy case offer a number of signs that point to prominent businessman and socialite Alex Von Furstenberg’s involvement in the sale of a controversial 66-acre site in Beverly Hills that was for years controlled by spec developer Mohamed Hadid.
An approval of the sale came from a bankruptcy judge this week, days after a bankruptcy auction produced a single offer that valued the property at roughly $34 million.
“Everyone’s had a fair shot, and that’s what the judge said ultimately,” Aram Ordubegian, an attorney for one of Hadid’s indebted entities, said of the sale. “Basically everyone had their chance, and this is the only buyer that showed up.”
The sale marked an apparent end to one of L.A.’s longest-running and highest-profile land use battles: Hadid originally intended to build an extravagant luxury compound on the choice hilltop site, which intersects with the popular Franklin Canyon park, but his plans prompted a wave of opposition from residents who advocated for continued public access. The fight began more than a decade ago, and over a year the hopes of preservation — and a bitter bankruptcy court feud — have centered around an entity called Give Back, which emerged as the primary creditor by buying more than $30 million of the debt.
Give Back is managed by the high-powered attorney Ronald Richards, who, while taking on a role as the chief antagonist to Hadid, repeatedly promised his client was only interested in maintaining the land for nature and public use. On Thursday, following the judge’s approval, Richards framed the sale as a sweeping victory for the public against unscrupulous development interests.
“It was a great result — it was honestly like one of the highlights of my career, representing a client that was going to get an asset and preserve all this green space,” Richards said. “That was the motive from Day One. That was the stated purpose … and everyone that is walking those trails can one day look back historically and remember this fight.”
Hadid did not respond to a request for comment, although last month the developer, who was also recently embroiled in a protracted fight over another project, the now-demolished spec mansion known as Strada Vecchia, told TRD he was turning his attention to projects abroad.
The buyer was revealed in court documents as a Delaware entity called Castle Real Estate, LLC.
The individual, or people, behind the corporation remain undisclosed, but legal filings suggest the involvement of Von Furstenberg, the wealthy investor and businessman who is now the director of the media and digital holding company IAC. The 52-year-old Von Furstenberg, a longtime L.A.-resident, is the son of the fashion icon Diane von Furstenberg and the German royal Prince Egon von Furstenberg; he is also a stepson of the billionaire Barry Diller.
Alex Von Furstenberg first surfaced as an alleged player in the Beverly Hills land saga last year, when Hadid, as part of a civil suit, claimed the businessman had reneged on a deal.
Von Furstenberg, who lives in the area and often hikes in the park, was interested in conserving the land, Hadid claimed, and the two met at a restaurant in Century City to discuss a possible deal. According to Hadid, Von Furstenberg agreed to pay $20 million for a portion of the land to keep for preservation, only to renege and form Give Back, in alliance with Richards, in an attempt to wrest control of the whole property.
Hadid’s civil suit, which accused Von Furstenberg and Richards of orchestrating “a malicious, fraudulent scheme” to “essentially steal” the undeveloped land, was later dismissed.
Give Back has never disclosed its funding, and Von Furstenberg’s possible involvement was never clarified. Although Castle Real Estate’s members are not disclosed, court documents show that the manager of the entity is the Beverly Hills attorney Michael Eisner, who has represented Von Furstenberg. In a filing, the court-appointed trustee, while asserting that the buyer is acting in good faith, also indicates the buyer’s connection to Give Back.
“Out of full and completed disclosure,” an attorney for the trustee wrote in part, “the Trustee is informed that various entities that have indirect economic interests and ownership interests in the Buyer also have indirect economic and ownership interests in Give Back, LLC.”
Eisner did not respond to an interview request, and Von Furstenberg could not be reached.
Richards said he did not know who the members of Castle Real Estate are and had not been in talks with the buyer.
The sale approval came less than a week after an auction that had been in the works for months and was heavily marketed, including with various press releases and print ads in the Wall Street and Los Angeles Times, according to court documents. The promotional flurry produced 71 inquiries from prospective bidders but led to only three showings; last Thursday morning, when the auction began, representatives for only two qualified bidders, one of which was Give Back, were present at a meeting room at the Beverly Hilton, while another was waiting online. That morning one bidder — the eventual buyer — put forth a stalking-horse offer; additional bidding then opened at 11 a.m., but no more offers came forward.
The trustee valued the offer at $34.175 million, a price likely to swell a bit with payment of taxes due and fees on the sale.
For unentitled land, it’s a high figure, of course — but also far below the property’s previous list prices and valuations once touted by Hadid’s team: A fair value, one lawyer for Hadid said months ago, was north of $130 million.
“Based on our marketing and our feedback from the market, that was a fair price,” Michael Walters, regional president of Tranzon Asset Strategies, the firm that conducted the auction, said last week of the $34 million winning bid.
Under the terms of the deal, the buyer is paying $1.7 million in cash and assuming $555,000 in property taxes. The buyer, critically, is also taking on the debt obligations, which include a $33 million claim from Give Back. And that claim, Richards emphasized, now effectively secures the long-touted preservation goal, even if the entity buying it has not explicitly disclosed its intentions or revealed its backers.
“They’re not going to watch me beat Hadid and win this case to then have a new fight to develop the property. That would make no sense,” Richards said. “You’d need my cooperation … and I’m sure that whoever put up the money has the same sort of global plan for this project as we did.”
The post Signs point to Von Furstenberg in deal for Hadid’s parcels in Franklin Canyon appeared first on The Real Deal Los Angeles.
Powered by WPeMatico