Mohamed Hadid has been accused of lying after he claimed in court documents he’s facing a whopping $60 million loss over his controversial Los Angeles mega-mansion that a judge has ordered to be torn down.
The embattled real estate tycoon – father of supermodels Bella and Gigi Hadid – claims to owe $15 million in court judgments against him and has had to ‘drastically downsize’ from a 48,000 sq ft home to a more ‘modest’ ranch-style property.
And he claims he’s made no money from the caviar and champagne products that carry his name, and his famous daughters’ eyewear line – also using the Hadid brand – has gone belly up.
But his declaration – which was made public before being sealed last Tuesday – about his money woes is ‘blatantly and intentionally deficient,’ blasted lawyers for neighbors suing him over the ‘monstrosity’ towering over their homes.
‘(Hadid) is now concealing his finances to avoid being called to task.’
The maverick developer’s ‘I’m broke’ claims came in response to Judge Craig Karlan’s order for him to produce – by a court hearing held Tuesday – positive proof that he doesn’t have the money to pay the estimated $5 million cost of demolishing the giant house at 901 Strada Vecchia Road.
Earlier this year the judge dubbed it a ‘clear and present danger’ to the upscale Bel Air community where it sits.
Mohamed Hadid has been accused of lying after he claimed in court documents he’s facing a whopping $60 million loss over his controversial Los Angeles mega-mansion that a judge has ordered to be torn down
The maverick developer’s ‘I’m broke’ claims came in response to Judge Craig Karlan’s order for him to produce – by a court hearing held Tuesday – positive proof that he doesn’t have the money to pay the estimated $5 million cost of demolishing the giant house at 901 Strada Vecchia Road (pictured). Earlier this year the judge dubbed it a ‘clear and present danger’ to the upscale Bel Air community where it sits
Hadid claims he’s made no money from the caviar and champagne products that carry his name, and his famous daughters Bella and Gigi Hadid’s eyewear line – also using the Hadid brand – has gone belly up.
Hadid – who was criminally prosecuted over illegal construction of the huge house and is also being sued by neighbors, led by Joe Horacek – claimed in his declaration: ‘The stigma of the project and the impact on my life over the past six years that Joe Horacek has harassed me have been personally devastating…
‘The stigma and expense in this matter (the neighbors’ civil lawsuit against him) and the criminal matter have seriously damaged me and, at 72 years of age, it is not as though I can start over.
‘I have no present nor presently foreseeable potential to fund the demolition now or ever.’
Hadid said that at 901 Strada Vecchia, he used $30 million of his own money to buy the land and start building.
And to finish construction he took a loan from First Credit Bank that ‘is guaranteed by me and the balance is well over $20 million with interest. I also owe at least $7 million to other lenders.’
He blamed the notoriety and publicity over the mega-mansion for causing him money problems at several other LA building projects he has going at present.
One Beverly Hills residential development with a construction loan of $97 million on it has been delayed, costing him ‘more than $10 million in interest.’
Another 70-acre project has a substantial loan that’s in default, and, said Hadid, ‘There are no funds available… I stand to lose that property. I have no ability to cure that default at this time.’
He added: ‘My financial predicament seems surprising to some, including the plaintiffs (the neighbors suing Hadid), who follow me on social media. I have drastically downsized my lifestyle, moving from a 48,000-square foot home to a modest ranch-style home which was purchased at no money down from an acquaintance.
‘I also have several (court) judgments against me which total more than $15 million. I also have personal property such as art, watches and other personal property… and I own a 1928 Packard classic auto and a 2003 0r 2004 Morgan three-wheeler. Any other vehicles I drive are leased.’
DOWNSIZED HOME: The embattled real estate tycoon claims to owe $15 million in court judgments against him and has had to ‘drastically downsize’ from a 48,000 sq ft home to a more ‘modest’ ranch-style property (pictured)
OLD HOME: Hadid said: ‘My financial predicament seems surprising to some, including the plaintiffs (the neighbors suing Hadid), who follow me on social media. I have drastically downsized my lifestyle, moving from a 48,000-square foot home to a modest ranch-style home which was purchased at no money down from an acquaintance’
Hadid lashed out at the ‘vendetta’ Horacek and other neighbors have against him and the decision by Judge Karlan to appoint a receiver to oversee tearing down 901 Strada Vecchia.
‘My ability to finance new projects is in peril, all based upon the actions of the plaintiffs in this case,’ he said.
‘Due to this court’s receivership order, the litigation, the revocation of (building) permits and the fact that I may never be able to build at 901 Strada, I stand to lose over $60 million between my personal investment and the guarantees that I have made to various lenders.
‘My reputation is tarnished and my ability to go out and borrow other money, it’s fractured at best.’
Hadid trashed reports of other money-making enterprises he’s said to have a hand in.
‘I also know that the plaintiffs will say that I have investments overseas including a development in Egypt, a wine label and even caviar. The wine and caviar are not assets owned by me.
‘There are persons who have taken other existing luxury products and affixed my name for publicity. In turn, I will someday receive a small stipend per item sold but to date I have not received any compensation from these products.
‘As to the Egyptian project, no ground has been broken on the project, and even then, I am a consultant and designer and have the promise of a future benefit upon the completion and sale of the project several years from now.
‘There was also a failed attempt to market eyewear under the Hadid name, but that venture was my daughters and, other than a lot of unsold eyeglasses owned by investors other than me, there are no assets there.’
Finishing up his declarations, Hadid added: ‘In summation, I am 72 years old and do not have the millions of dollars needed for the demolition of Strada Vecchia.’
At Tuesday’s court hearing in Santa Monica, Gary Lincenberg, lead attorney for the legal team in the neighbors’ lawsuit, scoffed at Hadid’s declaration that he’s broke and called on Judge Karlan to hold him in contempt and impose cash penalties for ‘making false statements’ and ‘hiding money.’
Hadid said that at 901 Strada Vecchia, he used $30 million of his own money to buy the land and start building
‘Hadid’s declaration is blatantly and intentionally deficient,’ said Lincenberg.
‘Hadid did not provide a list of personal assets, a list of bank accounts and balances, or a list of investment accounts and balances.
‘Hadid did not even summarize his income. Hadid’s declaration suggests he has absolutely no income or liquid assets whatsoever.’
Douglas Wilson, the receiver appointed to oversee the destruction of Hadid’s massive house, asked Judge Karlan to approve his demo plan and for permission to take out a loan – or sell the house and land – to raise the money to raze it to the ground.
And he stressed that demolition is urgent due to the threat of winter rain shifting the soil on the steep hillsides of the site.
Judge Karlan re-affirmed Tuesday his order to demolish the property and instructed Wilson to sell the house and land to raise the money to pay for the demo.
The judge’s ruling prompted Hadid’s attorney Larry Rothstein to ask for the receiver Wilson or the neighbors to post a $50 million bond because Hadid is being ‘deprived of his property.’ Judge Karlan denied the request.
Hadid’s mammoth house – which he once hoped to sell for $100 million – was originally permitted for 15,000 square feet but the house grew to around 30,000 square feet with much of that additional construction illegal.
He ignored orders from Los Angeles City to stop building and in December 2015, in an almost-unprecedented move, the city decided to prosecute him criminally.
He pleaded no contest to three criminal charges involving illegal construction and was hit with three years probation and a slew of fines.
But his legal problems are far from over.
Also looming in January 2021 is the civil trial where Horacek and other neighbors suing the developer are seeking financial damages for the eight-year ‘nightmare’ they claim they’ve endured.
If Hadid loses, it could cost him millions more.