$13.9M Aspen estate up for grabs
By TROY HOOPER Special to the Daily Press
When Hollywood mogul and Malibu resident Mervyn Adelson filed for bankruptcy this week, it botched the public auction of his posh multi-million dollar Aspen, Colo. compound.
An $8.8 million bid to purchase an interest Adelson’s Aspen estate this week was reneged when a bankruptcy filing surfaced after the auction had already been completed.
San Francisco-based Union Bank of California N.A. recently foreclosed on Adelson’s home. Adelson is co-founder of Lorimar Telepictures and former husband to television journalist Barbara Walters. Adelson failed to pay his mortgage, according to Tom Smith, the Aspen-based attorney for the bank.
But just hours following an Aspen couple’s submission of the winning bid to buy the bank’s claim to Adelson’s opulent 6.18-acre compound at 1890 Castle Creek Road, Carol Foote, the deputy public trustee for Pitkin County, was informed that Adelson had filed for bankruptcy in California on Tuesday afternoon.
Under federal law, the bankruptcy filing nullifies the public auction, held Wednesday morning on the steps of the Pitkin County Courthouse in Aspen.
“We weren’t advised of the bankruptcy until that afternoon.... We found out late,” Foote said.
Had the bid gone through, Foote said it would have been the highest in a foreclosure case she has seen from anyone other than a creditor since she began working in the county treasurer’s office in 1974. That, however, is now moot and the bid has been withdrawn.
5D8,“There was no sale. If there was something completed, it would have been in violation of the bankruptcy,” she said.
The Chapter 11 filing is the latest misfortune for Adelson, a one-time billionaire who served as vice chairman of Time Warner from 1990 to 2000.
Earlier this summer, Aspen police charged the 73-year-old with driving under the influence of drugs, reckless driving and child abuse after he allegedly careened his SUV into a number of trees and parked cars with his 2-year-old daughter riding along as a passenger the morning of June 8. The case is still pending and his attorney has said the incident was neither intentional nor negligent, but rather the unfortunate result of Adelson’s medical condition.
Adelson's bankruptcy attorney in Los Angeles could not be reached for comment this week. Adelson also could not be reached.
According to a filing in the U.S. Bankruptcy Court for the Central District of California in Woodland Hills, Adelson’s assets are currently valued at between $50 million and $100 million, and his debts between $10 million and $50 million.
The file also includes a “notice of form deficiency,” stamped just six minutes after the bankruptcy filing, indicating that Adelson’s Chapter 11 is incomplete and that he has until Sept. 25 to provide further information required by the court. The notice, issued by the federal court’s deputy clerk, Amy Ledesma, states that if the necessary information is not submitted, the bankruptcy filing will be dismissed.
Adelson’s filing lists six creditors, including the Union Bank of California, but the amount of money owed to each of them is not disclosed, except for $1 million owed to a law firm.
The fate of Adelson’s estate in Aspen hinges on the outcome of the Chapter 11 filing, and will likely require a new auction unless Adelson is able to reorganize his finances, pay his creditors and keep the home — an option made possible by Tuesday’s bankruptcy declaration, even if it is unfinished.
“It’s a question of what happens in bankruptcy court,” said Smith, assuming the Chapter 11 filing will be completed. “It could be 90 days or nine years. As far as I know, there is no time limit.”
“It’s a question of what happens in bankruptcy court. It could be 90 days or nine years. As far as I know, there is no time limit.” — — TOM SMITH Attorney, Union Bank of California N.A
Complicating matters is the fact that the Union Bank of California holds the second mortgage on the property and another bank has the first mortgage, meaning that creditor must be paid before Union Bank if the property is sold.
The estate is divided into two separate lots — Wednesday’s highest bidder offered $5.8 million for one lot and $3 million for the other — and includes an eight-bedroom, six-bathroom house, a barn rumored to have cost close to $1 million and a separate caretaker’s quarters. A listing in an Aspen Board of Realtors’ publication describes the property as a “fabulous compound.”
Eighteen months ago, Adelson’s estate was listed for over $25 million but it is currently offered at $13.9 million, according to the Aspen Board of Realtors.
Adelson, who is believed to have lived in Aspen for some 30 years, was awarded the Sheba Humanitarian Award by former Israeli Prime Minister Benjamin Netanyahu.
Originally published in the Santa Monica Daily Press print edition on September 13, 2003. Read the original PDF.