Jeans Company Moguls Look To Boost Multi-Billion $ R/E Holdings By Foreclosing On $25M Defaulted Note Bought For $15M Secured By Versace Mansion, Boutique Hotel Currently For Sale At $100M
- FOR $100 million, the buyers of Casa Casuarina, the mansion that once belonged to the fashion icon Gianni Versace, will get a 23,000-square-foot spread in Miami Beach with a 54-foot-long pool lined with mosaic tiles and 24-karat gold. They will acquire millions of dollars’ worth of Italian furniture — one room’s windows alone are framed by $250,000 in silk-and-velvet drapes, the current owner said.
The mansion also comes with a boutique hotel with 10 suites, British-trained butlers and a restaurant that serves cocktails in Versace martini glasses.
That hotel will come in handy, because whoever buys Casa Casuarina may need at least half those rooms for lawyers.
The mansion — Mr. Versace was gunned down at its entrance gate in 1997 — is embroiled in a particularly complicated legal battle, taking some of the shine off this trophy home for any prospective buyers.
The mortgage on the property is in default, and the owners of the debt, an entity affiliated with the Nakash family of New York, are battling in Miami courts to foreclose on the mansion.
The Nakashes, owners of Jordache Enterprises, the jeans company, are outraged at the high listing price for Casa Casuarina. The mansion’s current owner, telecom mogul Peter T. Loftin, put the residence on the market for $125 million in June and lowered it to $100 million in November.
The Nakashes want the court case to play out expeditiously so they can take the property over in foreclosure, said Jonathan Bennett, who manages the family’s multibillion-dollar real estate holdings, which include three hotels in Miami Beach, all on Ocean Drive.
“The Versace mansion has been listed for an outrageously inflated price,” the family said in a statement, “for the main purpose of trying to gain some tactical advantage in ongoing litigation.”
Mr. Loftin denied that he was trying to stall the legal case in order to sell the property on the open market for more.
“Absolutely not,” he said. “It is a good time for me to sell it. Properties are selling now for large amounts.”
For some New Yorkers, a $100 million price tag may not induce sticker shock . But in Miami, Casa Casuarina’s list price is more than twice the highest recorded sale — of a 10-bedroom home on Indian Creek that sold for $47 million last year.
The only other property in Florida to draw such a lofty asking price was a Palm Beach home that Donald Trump sold for $100 million in 2008 to a trust linked to Dmitry Rybolovlev, a Russian billionaire.
VM South Beach, the entity affiliated with Jordache, filed a federal foreclosure lawsuit in December 2011 against Casa Casuarina and Mr. Loftin for failure to pay a $25 million mortgage bought by the Nakash family for $15 million from WestLB, a German bank.
Mr. Loftin said he had stopped paying his mortgage after 2010 when he realized the loan documents at closing did not reflect his final agreement with WestLB. He has alleged a conspiracy involving the Nakashes and the German bank.
“They bought a fraudulent note,” he said of the Nakashes. “They knew it was fraudulent.”
Mr. Bennett, the Jordache representative, called the allegations “completely ridiculous,” noting that Mr. Loftin “signed the documents.”
Taxes, too, were not paid for three years, and Mr. Loftin is in a dispute with his tenant, the hotelier Barton G. Weiss, over who is responsible for the payment. (Mr. Weiss, who was out of the country this week, did not respond to e-mailed questions sent through an assistant.)
- But even if the new owner was willing to pay a premium to acquire the mansion free of legal encumbrances — which one lawyer estimated could cost around $40 million — its current tenant, Mr. Weiss, would have to be persuaded to leave. He operates the boutique hotel, the Villa by Barton G., on the property, which rents one-bedroom suites with “custom” king-size beds for $2,250 a night.
Mr. Weiss has a lease stretching to 2020, with an option to renew for 10 more after that.
“There are always ways to get out of leases,” Mr. Loftin said. He suggested the buyer share the mansion with Barton G. and “take the whole top floor for himself.”
See also, Versace mansion update: Will judge throw out Jordache family’s foreclosure?:
- [A]dding to the intrigue is a claim related to Ponzi schemer Scott Rothstein of Fort Lauderdale. Rothstein had invested in the mansion, and now a bankruptcy trustee overseeing Rothstein’s defunct law firm – Rothstein Rosenfeldt Adler or RRA – is demanding that money back.
The trustee alleges that the company related to the Nakash family, VM South Beach, shouldn’t receive rent income from the property until the disputes are cleared up.
“Before receiving the assignment of the Loan Documents, VM South Beach had access to information showing that RRA monies were transferred to Casa and used by it… Consequently, VM South Beach did not receive the assignment of the note for value or in good faith, and is not a holder in due course,” the trustee, Hebert Stettin, said in a recent motion.