Neighbors of property tycoon Mohamed Hadid claim valuables are being removed from his notorious Los Angeles mega mansion and are concerned he’s committing bankruptcy fraud, their attorney told a court Friday.
The lawsuit against the father of supermodels Gigi and Bella Hadid for building the dangerous property – dubbed the ‘Starship Enterprise’ because it’s so huge – was back in court Friday although the businessman didn’t appear.
LA Superior Court judge Craig Karlan told the lawyers he was unable to make any further rulings until the bankruptcy issue is dealt with.
Mohamed Hadid was spotted in Miami Friday, while his Bel Air neighbors raised concerns over bankruptcy fraud in court, claiming property was being removed from his mega-mansion
Lawyers for Hadid’s (right on Friday) company said that if Hadid was involved in the removal of property from his home, he was just protecting his assets and denied any bankruptcy fraud
A judged declared that Hadid’s illegally-built Bel Air mansion had to be demolished because it was putting neighboring homes in danger
Last month the judge declared the Bel Air mansion ‘must come down’ because it is a ‘clear and present danger’ to the nearby homes and he gave the job of supervising the demolition to a receiver he appointed.
Supposed billionaire Hadid then filed for bankruptcy the day before Thanksgiving, a week after the judge’s ruling.
The court heard Friday that the neighbors’ legal team plan to file to have the bankruptcy – dealt with by a separate court – dismissed next week.
During the hearing lawyer Gary Lincenberg, representing the neighbors, said his clients fear Hadid could be ‘engaged in bankruptcy fraud’ after observing suspicious activity at the home, he said: ‘Since the court received the receivership order the neighbors, our clients, have observed a lot of people on the property.
‘A lot of what they are observing is people removing valuables from the property.’
Judge Karlan said there was nothing he could do about it, however, and said they needed to raise it with the bankruptcy judge.
A look at the various illegally constructed elements of Hadid’s Bel Air mega-mansion
Hadid claimed bankruptcy and said that he cannot afford to pay for the demolition of the home
Hadid (with model daughters Gigi, left, and Bella, center) is also involved in a criminal case in which he has pleaded no contest to illegal construction and is serving three years probation on condition he either bring the house into compliance with building regulations or tear it down
Mr Lincenberg said it was not just potential bankruptcy fraud that was of concern but whether the assets being removed could be used to pay for the expensive demolition – which Hadid has said he can’t afford.
Russell Stong, a lawyer representing Hadid’s company 901 Strada LLC, said if Hadid was involved in the activity at the house he was just protecting his assets and denied his client could be engaged in fraud.
The bankruptcy filing for 901 Strada LLC was filed by Hadid’s legal team who previously told the court the tycoon was broke and cannot afford to pay for the demolition – estimated to cost around $5m – or even the receiver who’s fee is $500,000.
Judge Karlan said he had to immediately stay the order he made for the property to come down in light of the bankruptcy filing and he is currently unable to rule when it should be demolished and how it should be paid for.
He said: ‘I can’t make any orders with regards to the property right now… I can’t do anything until the bankruptcy court tells me I can.’
The judge set a new court date for Thursday December 12 – when the neighbors’ lawyers hope to have got an order for the bankruptcy to be dismissed.
After the hearing Mr Lincenberg said he is confident the bankruptcy filing will be dismissed.
He said: ‘It’s going to be resolved very quickly. We will be filing a motion to dismiss the bankruptcy based on bad faith and it will be dismissed, even opposing consul recognizes that.’
On the bankruptcy fraud suggestion, he added: ‘I didn’t make bankruptcy fraud allegations, I said there’s a question. People are seeing people removing assets. I raised the question.’
He said he couldn’t say what specific assets were observed being removed.
After the hearing Mr Stong told DailyMail.com that Hadid needs to protect his assets in light of bankruptcy and rubbished the suggestion that any fraud was taking place, he said: ‘If he’s involved, because we don’t know he’s involved, he’s protecting the assets which is exactly what he should do.
‘He needs to protect the assets in bankruptcy, he cannot dispose of them. They’re held in that estate and he is not to remove them, but he’s to protect them, so maybe he’s just protecting them. Then again we do not know that he’s doing that, that’s their allegation.’
Asked what he may be protecting them from, Mr Stong added: ‘Whatever that may be, protecting them from thieves.’
Mr Stong added that he doesn’t think the bankruptcy will be dismissed.
The civil case against Hadid is running parallel with a criminal case in which the tycoon has already pleaded no contest to illegal construction and is serving three years probation on condition he bring the house into compliance with building regulations – or tear it down – within that time.
Last month LA City prosecutors filed a motion in the criminal case calling for the eyesore building to be completely demolished by April 1 next year.
A hearing to rule on the motion in the criminal case is scheduled for Friday December 13.
If the judge in the criminal case does call for it to be torn down then Hadid may be forced to do so regardless of the bankruptcy filing.