Victorino Noval and the Mountain of Beverly Hills (Credit: Getty Images and Redfin)
The owner of The Mountain of Beverly Hills mega-listing has filed for bankruptcy protection, The Real Deal has learned.
The Chapter 11 proceeding marks the giant bubble bursting on the 157-acre spread of undeveloped land, listed last July for a record-breaking $1 billion. The sprawling development site on Tower Grove Drive remains on the market, now for nearly half the price.
The owner, Secured Capital Partners, filed for Chapter 11 on Wednesday, a day before four liens attached to the property were set to expire. Any default on those loans, which total about $190 million, could have prompted foreclosure.
Secured Capital is seeking relief from $50 million to $100 million in liabilities, according to the filing. While some of that is attached to The Mountain, Secured Capital’s attorney Ronald Richards said most of it is tied to other assets the entity owns.
On the filing, the company listed the value of its assets at less than $500,000, a tiny fraction of what it had originally sought for The Mountain. Richards claims that was a typo by the paralegal, and Secured Capital’s assets should be in the $100 million to $500 million range. Still, that pegs the value of The Mountain at least $150 million less than what’s its on the market for currently, and roughly half of its original ask.
He said the bankruptcy would likely affect the potential sale price, which was slashed in February. It is likely the property’s current $650 million price tag will be further reduced as it undergoes a sale through bankruptcy court, Richards said.
Still, he maintained that “the property will be sold or refinanced utilizing the best value the market or lending environment will bear.”
Listing agent Aaron Kirman did not respond to requests for comment.
Secured Capital acquired the sprawling development site — with the liens attached — from Tower Park Properties in 2016 through a title transfer. Both entities are tied to the family of Victorino Noval, an investor who was convicted of mail fraud and tax evasion. Secured Capital is controlled by Noval’s son, Franco Noval.
While it is Tower Park that was at risk of defaulting on the loans, Secured Capital could have still lost the property to foreclosure given that it acquired the title with the loans.
Documents show Tower Park owed the lender — the property’s previous owner, Mark Hughes Family Trust — about $190 million. Tower Park, controlled by the elder Noval and investor Charles Dickens, itself filed for bankruptcy in 2008.
By filing for Chapter 11, Secured Capital will have more time to reorganize its debt. The company is required to file a plan of reorganization by the end of June, court records show. A preliminary hearing has been set for Aug. 13.