(Bloomberg) -- The developer of one of the biggest homes ever built in the U.S. -- featuring a moat and 30-car garage -- filed for bankruptcy to keep lenders from foreclosing on the Los Angeles property.
Dubbed “The One,” the mansion was being developed by Crestlloyd LLC when a fight broke out with lenders, including Hankey Capital. The lenders went to court in Los Angeles claiming they weren’t being paid, according to court papers. Eventually a receiver was appointed to handle the project.
Crestlloyd “believes that the receiver has hampered efforts to complete the property, as well as to market, show, and sell the property in its current state,” the company said in bankruptcy court papers.
Ted Lanes, the court-appointed receiver, declined to comment Wednesday.
“I’m disappointed,” Don Hankey, whose specialty is subprime auto financing, said about the bankruptcy filing. “All we want is to get our capital returned.”
Hankey, who loaned more than $82.5 million for the project, had a foreclosure sale of the property set for Wednesday.
Property developers sometimes use bankruptcy as a way to block lenders from foreclosing. Under Chapter 11 rules, lawsuits, including state foreclosure actions, are halted to give a company the chance to reorganize and clear its debts.
“The One” is worth about $325 million, but only has $176 million worth of secured loans attached to the property, Crestlloyd claimed in court papers. Even if the property sells for half its original $500 million price, there’s still plenty of value to pay all the debts, Crestlloyd said.
Lanes planned to list the home for $225 million. The 105,000-square-foot (9,750-square-meter) main house - almost twice the size of the White House - features four swimming pools, a two-story waterfall, a nightclub, movie theater, four-lane bowling alley, beauty salon, spa, gym and cigar lounge.
The case is Crestlloyd LLC, 21-bk-18205, U.S. Bankruptcy Court, Central District of California (Los Angeles).
(Updates with comment from lender in fifth paragraph, additional details in sixth.)
©2021 Bloomberg L.P.