conservation group acquires hadid properties at auction
As reported previously, the United States Chapter 7 Bankruptcy Trustee held a public auction on March 24, 2022 for the 65 acres of land that Hadid owned in Franklin Canyon Park, including parts of the Hastain Trail. The buyer of the land is “Castle Real Estate, LLC” which was formed in Delaware the day before the auction.
While not much is known about Castle, it is clearly aligned with Give Back, LLC in terms of conservation and, according to a recent public statement by a Give Back representative, the land is now “secured” from development, Hadid “is history” and “the trail is safe.”
Hillsides Against Hadid participated in, and closely monitored the Bankruptcy proceedings. Attorney Ron Richards led the group that masterfully wrangled the land from Hadid (requiring an outlay of tens of millions of dollars) and he and his legal team fought tirelessly for 16 months in the Bankruptcy Court to make this happen in the final quarter and moments before the buzzer.
In brief, below are some highlights of the story:
Between 2004-2010, Hadid quietly bought up approximately 65.61 acres of private land in Franklin Canyon Park by way of two shell entities: Lydda Lud, LLC and Coldwater Development, LLC with plans to build six mega-mansions.
In 2011, led by open-space advocate Ellen Paul, “Friends of Hastain Trail” commenced a lawsuit against Hadid to establish a public easement and permanent right-of-way over the Hastain Trail. While Ellen Paul and Friends prevailed against Hadid at trial (preserving access to the trail for the public and future generations), the decision was sadly and inexplicably reversed in the Court of Appeal in 2016. Hadid’s plans to develop then proceeded.
In order to pay off existing debts (and fund mega-mansion developments like Strada Vechia), in March 2017, Hadid borrowed $25 million from Romspen California Mortgage and pledged the land in Franklin Canyon as collateral. Hadid then defaulted on the loan and failed to pay back Romspen as per the terms of the loan agreement. Although Romspen generously gave Hadid numerous extensions to pay the loan, by the Summer of 2020, Romspen was looking for an exit ramp.
In July 2020, Give Back, LLC (a greenspace and land conservation group funded by anonymous donor/s) discovered Hadid's default and approached Romspen. By September 2020, Give Back paid Romspen an undisclosed amount to buy out Hadid's loan obligation to Romspen, and Give Back then became Hadid’s banker.
Give Back was not as lenient to Hadid and gave him no further extensions or accommodations. This is because Give Back was keenly aware Hadid had pledged the land in Franklin Canyon as collateral for the loan.
When Hadid failed to pay Give Back all amounts due under the loan (approximately $27 million at the time), as per the loan agreement, Give Back noticed default and sought to take Hadid's land in Franklin Canyon by way of foreclosure sale. The date for the foreclosure sale was promptly set for January 20, 2021.
To stop the foreclosure, Hadid caused the two entities holding the land (Lydda and Coldwater) to file for Bankruptcy on January 15, 2021.
Between January and December 2021, Hadid tried numerous stall tactics and maneuvers in the Bankruptcy Court to avoid losing the properties. As reported here previously, these maneuvers included telling the Bankruptcy Court that certain buyers were interested in the property, including a member of the Saudi Royal Family. Such "buyers,” however, never materialized. By the end of 2021, the US Trustee stepped in and ordered the property sold at auction to pay off the loan to Give Back which was then valued at over $34 million.
On March 24, 2022, the auction was held and Castle Real Estate, LLC acquired the Hadid owned land "subject to" Give Back’s existing $34 million debt. Most of this history is laid out in the two documents attached below.
Summary: The fight to save Hastian Trail (and adjacent parcels in Franklin Canyon Park) from development is now over. The fight to rid Hadid from the Franklin Canyon Park hillsides at Cedarbrook, however, continues. All in all, this is very good day and one to celebrate.
A HUGE Thank-You goes to Ron Richards who led the charge against Hadid (and his army of lawyers) and of course, to “Give Back, LLC” (whoever you are)!
Steven L. Weinberg,
Founder, Hillsides Against Hadid.org