LOS ANGELES — A planned foreclosure auction of the largest modern home in the country has been delayed after billionaire lender Don Hankey was accused of maneuvering to take control of the troubled Bel-Air project and leave other debt holders out in the cold.
"The One," a 105,000-square-foot unfinished mansion once marketed for $500 million, had been set to be sold to the highest bidder Wednesday. The auction was scheduled after developer Nile Niami's limited liability company, Crestlloyd, defaulted on $106 million owed to Hankey's real estate lending arm.
But a Los Angeles County Superior Court judge delayed the trustee's sale until later this month after lender Joseph Englanoff alleged that Hankey reneged on an agreement to have the house completed and sold by real estate brokers, and instead was using the auction process to unfairly take ownership of the mansion or hog the proceeds if it is sold to a third party.
Englanoff, a Los Angeles-area physician and real estate investor who lent $30.2 million to Crestlloyd in 2018 through his Yogi Securities Holdings, states in legal filings that he is still owed $22 million.
He said in a declaration that he had agreed to Hankey's proposal to appoint a receiver in July to finish the house so it could get a certificate of occupancy and be sold through a traditional listing. The luxurious mansion at 944 Airole Way features multiple swimming pools, a beauty salon, a four-lane bowling alley, a multiplex-size movie theater, a rooftop putting green and other over-the-top amenities.
However, he accused Hankey of pushing ahead with the auction for the billionaire's own benefit even after two brokers last month agreed to list the property for $225 million.
"Although it is not anticipated that the sale of The One will generate $500 million it is certainly believed to be able to generate at least $225 million," Englanoff wrote in his declaration. "With a potential sales price of $225 million all secured debt would be paid and even [the developer] would net proceeds."
Hankey, 78, said in an email that he did try to work out a deal with Englanoff and "we never came to terms." He defended his decision to proceed with the auction.
"The public sale represents a unique opportunity to own an iconic property in one of the most desirable locations in the world," he wrote in the email.
In court papers, attorneys for Hankey Capital said the company's actions were legal and noted there is nothing preventing Yogi from bidding for the house itself.