(BLOOMBERG) - It is named "The One" because the sprawling hill-top mansion in Los Angeles has been touted as probably the most luxurious home to be built in recent years. With a price tag of US$500 million (S$680 million), it is supposed to come with more than 20 bedrooms and close to 50 bathrooms.
But this dream home will probably be left uncompleted as its developer has run into financial problems. A bankruptcy court judge recently approved the sale of this mega-mansion for only US$141 million (S$191 million) despite objections that the price wasn't high enough to compensate creditors.
The highest bid at a March 3 auction was less than half the US$295 million list price for the estate and a fraction of the US$500 million once floated by its developer, whose firm filed for bankruptcy last year when lenders moved to foreclose on the decade-in-the-making project.
Judge Deborah Saltzman said the sale should proceed despite the disappointing price.
Opponents of the sale had complained about the lack of a minimum required bid for the property and also said the war in Ukraine had deterred offers from potential foreign buyers.
The brokers selling the property said the auction price was reasonable, because potential bidders were deterred by the lack of a certificate of occupancy and construction problems that had nothing to do with global events.
The top bidder, Mr Richard Saghian, founder of apparel line Fashion Nova, argued that the court should accept his purchase because he followed the agreed-upon process and has the means to pay. But he could walk away if the sale is delayed, his attorney Sam Newman said.
The project's largest creditor, Mr Don Hankey, with US$132 million in claims, supported the sale. Putting the property out to market again was based on "hope and prayer and speculation" that someone would pay a higher price, said Mr Hankey's attorney Tom Geher.
"This is the real value of the property," Mr Geher said. "It's not the make-believe-fairy-tale value of the developer."
One creditor who contested the sale was Dr Joseph Englanoff, a Los Angeles doctor with US$20 million in claims. He argued that the auction failed to attract higher offers partly because global markets were roiled by Russia's invasion of Ukraine.
Potential buyers from the Middle East and Asia were among those who toured and expressed interest in the estate, but no one from overseas placed a bid.
Attorneys for Inferno Investment, a Canadian company with US$20 million in claims, cited a written offer from a member of the Saudi royalty who was willing to pay US$160 million.
But the judge dismissed those claims, noting that no formal or approved offers had been submitted since the auction.
The mansion's developer, Mr Nile Niami, also jumped in, announcing a plan to raise as much as US$250 million from individual investors. But that proposal was dropped when the property's managers barred would-be investors from touring the estate. Mr Niami's attorney Hamid Rafatjoo argued that more could be done to get a higher price.
"We're not selling a tract home," Mr Rafatjoo said. "There was a war and that war scared everyone."
While he'd like to get money from The One, Mr Niami said he is now focusing on a new project, a reality television network that he'll call "The One Truth".
He arrived for an interview at a Beverly Hills cafe in a chauffeured white Rolls-Royce Phantom, accompanied by his girlfriend who gave her name as Twiggy and a bodyguard Mr Niami calls Rhino. "I'm not worried about The One," Mr Niami said. "I'm moving on."