(HorizonPost.com) – A bankruptcy judge in Los Angeles last month gave final approval to settle a lawsuit between struggling real estate developer Mohamed Hadid and Skylark Capital owner Zach Vella, despite objections from the city of Los Angeles.
The lawsuit relates to a partially completed mansion at 9650 Cedarbook Drive in the upscale Los Angeles neighborhood of Beverly Crest. The 37-acre location and the planned 78,000 sq ft home were previously on the market with a listing price of $250 million, making it the largest permitted residential property in the city.
Hadid, through Treetop Development LLC, filed a motion in April seeking approval for the deal. In the motion, Treetop Development agreed to a compromise with Skylark Capital and its servicing company Skylark Servicing LLC.
The settlement was approved by Bankruptcy Judge Sheri Bluebond on May 20.
In her order, Judge Bluebond said the deal was “highly negotiated by sophisticated parties.” Under the ruling, the debtor-in-possession financing on the property provided by Skylark will increase by just over $6 million, from $10.5 million to $16.6 million.
This debtor-in-possession financing would be used by Treetop Development or a similar entity to continue conducting business while Hadid’s Chapter 11 reorganization is underway.
Hadid’s motion seeking approval for the deal confirmed that the parties involved reached a consensual agreement to address the “various disputes” to “facilitate a sale and potential plan process” while maximizing the value of the property in a way that will benefit Hadid’s estate and all of his creditors.
Hadid’s legal battles with Zach Vella’s Skylark Capital are nothing new. The developer has filed for bankruptcy five times in as many years to prevent Vela from foreclosing on his property investments.
In an interview with the New York Post, the 74-year-old Hadid, the father of models Bella and Gigi Hadid, claimed that he was a victim of predatory lending. Hadid accused Vella and Skylark of loaning him “enough money to hang ourselves” before they “stopped funding us.”
In his lawsuit against Hadid, Vella accused him of “outright theft” and fraud.
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