Thursday, August 06, 2015

Battle Between L.A. Archibishop, Two Aging Nuns Over $14.5 Million Convent Continues; Judge Voids Latter's Sale To Developer; Says Title Rests With Archdiocese, But Control To Be Held In Temporary Limbo While Suit Remains Pending

In Los Angeles, California, the Los Angeles Times reports:
  • Los Angeles County Superior Court James Chalfant ruled July 30 that the contested sale of the former convent of the Immaculate Heart of Mary sisters to restaurateur and urban developer Dana Hollister is invalid.

    The judge also confirmed that the eight-acre, villa-style hilltop property located in the Los Feliz section of Los Angeles is Church property under the oversight Archbishop José H. Gomez.

    “I would like to reiterate my continued commitment to all of the Immaculate Heart sisters that the archdiocese will take care of them and ensure their well-being now and in the future,” the archbishop said in a recent statement.

    The archdiocese initiated legal action June 19 to protect the sisters by seeking to nullify the “unauthorized” transaction with Hollister. In a recent deposition, Hollister confirmed that she took possession of the Waverly Drive property for $100,000 (of which the sisters received only $44,000), and the balance of $9.9 million in a non-recourse promissory note, with no payments for three years.

    The archdiocese contended that the sale violates the California law protecting the elderly from transactions that are not in their best interest — the five surviving Immaculate Heart of Mary sisters are between 77 and 88 years of age.

    Because the loan is non-recourse, it does not require payment after the three years, the archdiocese explained in a recent statement. As such, if Hollister were unable to pay the remaining $9.9 million, the only remedy to get the property back would be foreclosure and the sisters would have to pay the related legal costs.

    Other points of contention include the archdiocese’s lease of the buildings on the property for the priests’ house of prayer, which has a remaining term of 77 years, and Hollister’s reported plan to convert the villa property into a boutique hotel.

    Judge Chalfant set another hearing for Sept. 15 and ordered the lawyers to prepare proposals detailing possible remedies that would most benefit the five sisters. He said that Hollister may remain in possession of the property pending the hearing, but ordered her to pay $25,000 a month rent and stipulated that she cannot sell, lease or modify the property in the interim.

    “The care and well-being of all five sisters has always been our primary concern,” said the archdiocese in a statement released shortly after the July 30 court ruling. “We were forced to take legal action to protect the sisters from the Dana Hollister transaction, which allowed Hollister to take possession of their property away from them. We are grateful that the judge found the sale to Hollister to be invalid, and that he agreed that this was a ‘bad deal’ for the sisters.”
For more, see Judge rules LA convent sale invalid.

See also, Bloomberg Business: What's Next in Katy Perry's $15 Million War With Two Nuns (Nobody gets this property during the pendency of this lawsuit,” California Superior Court Judge James C. Chalfant told the lawyers.).

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