A 157-acre “mountain” in Beverly Hills, which hit the market last year asking a princely $1 billion, has sold at auction for the remarkably paltry sum of $100,000.
That’s a whopping 10,000 percent discount.
The property in the famed 90210 Zip code was last asking $650 million.
The lucky buyer at a sparsely attended foreclosure auction on Tuesday was the estate of late Herbalife founder Mark Hughes, which previously owned the distressed yet nonetheless mouthwatering luxury development opportunity, according to the Los Angeles Times.
Roughly twice the size of Disneyland, the property’s prime location northeast of the UCLA campus and Holmby Hills boasts 360-degree views from downtown Los Angeles to Catalina Island. With 32 acres of flat buildable land, per the Realtor.com listing, it has long been a dream site to develop real estate for billionaires, royalty and celebrities. It was previously owned by Princess Shams Pahlavi — a sister of the late shah of Iran –- as well as legendary television host Merv Griffin.
But as with any too-good-to-be-true deal, there’s a catch. Hughes sold the property in 2004 to investor Chip Dickens, who borrowed roughly $45 million from the Hughes estate as part of the deal. Today, that debt has grown to nearly $200 million with interest.
If that weren’t bad enough, several years ago, Dickens transferred the property to a limited liability company controlled by his partner, Victor Franco Noval – who recently tried and failed to declare Chapter 11 bankruptcy. The Hughes estate then moved to force a foreclosure auction. If it had sold to a third party, the $200 million debt would have transferred to the new buyer. But because the Hughes estate bought the land, it won’t get repaid for the $200 million loan they made.
But the drama isn’t over. Dickens, Noval and a representative for Secured Capital (which owns the debt) are planning to claim wrongful foreclosure and pursue other litigation after their $150 million offer for the property — which, notable, was higher than the estate’s accepted bid of $100,000 — was rejected a day prior to the auction.