When it comes to America’s most expensive homes, outrageous amenities like theaters, auto showrooms, and solid gold fixtures are to be somewhat expected. But some mega-mansions come with more than even a prospective buyer would want: legal woes.
Take the $100 million Casa Casuarina. The Miami Beach mansion peddles an enviable address on South Beach’s Ocean Drive, a storied history as the former home of Gianni Versace, a 10-suite boutique hotel staffed with British-trained butlers, and a glittering 24-karat gold-lined swimming pool. It also totes a laundry list of lawsuits, starting with a federal foreclosure suit filed in December of 2011 by VM South Beach, an entity affiliated with Jordache Enterprises’ Nakash family. It alleges that Casa Casuarina’s owner, telecom entrepreneur Peter Loftin, defaulted on a $25 million mortgage note. In December of 2012, Loftin countered with his own suit, through Casa Casuarina LLC, against original mortgage holder WestLB, alleging multiple counts of fraud pertaining to VM South Beach’s note.
Still following? A bankruptcy trustee also has a claim on the property, because Scott Rothstein, convicted of a $1.2 billion Ponzi scheme, held a minority share. Adding to the complications, taxes have not been paid in three years, reportedly due to a legal dispute between Loftin and Casa Casuarina’s hotelier tenant Barton G. Weiss, whose boutique hotel Villa by Barton G. rents one-bedroom suits for more than $2,000 a night.
Since the downturn, a series of high-end homes located across the U.S. have faced financial troubles, struggling with foreclosure filings, bankruptcies or lawsuits. In many cases the troubles were the result of a zealous development plan undertaken during the housing bubble, whether it be Bank of America’s 2011 repossession of ex-billionaire divorcee Patricia Kluge’s Charlottesville, Va., estate, Albemarle, or the 2012 bankruptcy auction of realtor-turned-developer John McMonigle’s Newport Coast, Calif., spec home, Villa Del Lago.
In Palm Beach, Fla., another developer, Dan Swanson filed for voluntary Chapter 11 bankruptcy protection in September against more than $27 million loans owed to two creditors on a lavish spec home. In October one of those creditors, TD Bank filed its own complaint via circuit court, seeking repayment on $21 million. On the market since 2010, the $74 million lakefront home, located at 1220 South Ocean Boulevard, has 27,000 square feet of living space including a 4,000-square-foot master suite with fireplace, a 3,000-bottle wine cellar and a commercial-grade elevator. If the property doesn’t snag a buyer by the end of the year, it’s reportedly expected to sell off in a bankruptcy auction come December.
Florida eclipsed Nevada as the nation’s foreclosure capital in 2012, according to RealtyTrac. High-end homes were not immune, including the largest single-family home in the U.S., Windermere, Fla.’s massive Versailles estate. The unfinished 90,000-square foot structure, which has a two-story wine cellar, three pools and 13 kitchens, faced a foreclosure auction last April due to an outstanding construction loan from Bank of America. It was the second scheduled auction in roughly six months. The owners, timeshare titan David Siegel and wife Jacqueline, were able to thwart repossession by refinancing with $20 million mortgage from ICR Finance Services. The hulking home is listed for sale: $65 million, unfinished.
Here’s a rundown of estates where, either presently or within the past several years, a lawyer may have done more good than a broker: