Property Tycoon Mohamed Hadid has filed for bankruptcy on behalf of his company, just a day before Thanksgiving. Hadid's plea comes a week after he was ordered to demolish his under-construction mega mansion in Los Angeles. Hadid is the father of supermodels, Bella and Gigi.
Hadid's company, 901 Strada LLC, filed for insolvency in federal bankruptcy court. In the plea, it was declared that the company is already in debts to the tune of $10-50 million owing to the construction of his 30,000 square-foot Bel-Air mansion. The construction on the mansion, described as an eyesore, began in 2011.
Bel-Air mansion led to bankruptcy
Disclosing the details of debts owed by his company, Hadid mentioned in the court documents that it owes $386,000 to a design and management company, $200,000 to a building materials company $35,000 to plumbers, and $93,000 to a demolition company.
The bankruptcy was filed by Hadid's lawyer, Bruce Rudman, who told LA Superior Court that Hadid was broke after a judge declared his under-construction mansion as dangerous and 'must come down.' It is believed that in case Hadid fails to foot the bill of demolition, estimated to be around $5million, the money from the taxpayers will be used towards the same.
Structure unsafe and dangerous- Judge Craig Karlan
In the judgement given on November 20, Judge Craig Karlan while ordering the demolition of the 30,000-square-foot structure, appointed receiver Douglas Wilson. "It's unsafe and it's dangerous. If this house came down the hill it would take a portion of the neighbourhood with it," said Judge Karlan after going over the reports of Hadid's structural engineer that the piles, supporting the massive mansion, were pushed only 20 feet into bedrock against the regulated 30 feet.
"This seems to me to be a clear-cut case where the property must come down. We're not talking about an extra wall or a different way into the kitchen. We're talking about the most significant aspect of the structure - the foundation," said the judgement.
Lawsuit filed by irked neighbours
The lawsuit was filed last year by Hadid's neighbours Joseph and Beatriz Horacek, and John and Judith Bedrosian. The neighbours are living directly below the under-construction mansion. In their complaint filed in the court, the complainants said Hadid built the "massive concrete structure, essentially a small hotel, without necessary permits, and in brazen defiance of numerous citations and stop work orders."
"The "seven-year saga" started shortly after Hadid bought the property in 2011, tore down the existing three-bedroom, 3,297 Spanish contemporary house and brought in "large Earth-moving equipment" to begin "unpermitted grading operations that reshaped the hillside to a perilous condition," said the neighbours in their appeal.