Los Angeles’ mega-mansion ‘the One’ now bankrupt

By Steven Church and John Gittelsohn | Bloomberg

The developer of one of the largest homes ever built in the United States – with a ditch and a 30-car garage – has filed for bankruptcy to prevent lenders from foreclosing on Los Angeles property.

Nicknamed “The One”, the mansion was being developed by Crestlloyd LLC when a brawl broke out with lenders, including Hankey Capital. The lenders went to Los Angeles court claiming they were not being paid, court documents show. Eventually, a receiver was appointed to manage the project.

Crestlloyd “believes the receiver has hampered efforts to complete the property, as well as to market, display and sell the property in its current state,” the company said in bankruptcy court documents.

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Ted Lanes, the court-appointed receiver, declined to comment on Wednesday.

“I’m disappointed,” Don Hankey, who specializes in sub-prime auto finance, said of the bankruptcy filing. “All we want is our capital back.”

Hankey, who has loaned more than $ 82.5 million for the project, announced a forced sale of the property on Wednesday.

The developer of one of the largest homes ever built in the United States – with a ditch and a 30-car garage – has filed for bankruptcy to prevent lenders from foreclosing on Los Angeles property. (Render of the document)
The developer of one of the largest homes ever built in the United States – with a ditch and a 30-car garage – has filed for bankruptcy to prevent lenders from foreclosing on Los Angeles property. (ED CRISOSTOMO, ORANGE COUNTY REGISTER)
An artist rendering shows fountains surrounding the upper floors of The One.
An artist rendering shows the rear of The One, a 104,000 square foot Bel Air resort designed by Paul McClean of Orange. The house is tilted to watch West Los Angeles and downtown LA in the distance.
An artist rendering shows lounge tables and booths that appear to float in an outdoor pool at the base of a two-story waterfall. Just inside the floating lounge is the house nightclub. In addition to a 74,000 square foot main house, the resort has a guesthouse and staff quarters totaling an additional 8,150 square feet, according to city records.
An aerial photo shows construction underway within the 104,000 square foot compound on a 4 acre lot that is approximately 2 1/3 football fields. Developer Nile Niami broke new ground in 2014 and is expected to complete construction by the end of 2017. He says he’s asking for $ 500 million for the complex when it’s completed. Although some West Los Angeles brokers are skeptical, they say there is still a possibility that its selling price will surpass the world record of $ 301 million.

Real estate developers sometimes use bankruptcy to prevent lenders from foreclosure. Under Chapter 11 rules, lawsuits, including state foreclosure actions, are suspended to give a business the opportunity to reorganize and write off debts.

“The One” is worth around $ 325 million, but has only $ 176 million in secured loans attached to the property, Crestlloyd said in court documents. Even though the property sells for half of its original price of $ 500 million, there is still plenty of value left to pay off all the debts, Crestlloyd said.

Lanes planned to list the house for $ 225 million. The 105,000 square foot (9,750 square meters) main house – almost twice the size of the White House – features four swimming pools, a two-story waterfall, a nightclub, a cinema, a four-lane bowling alley, a lounge. beauty, spa, gym and cigar room.

The case is Crestlloyd LLC, 21-bk-18205, US Bankruptcy Court, Central District of California (Los Angeles).

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