German Bank WestLB Threatening to Seize Versace Mansion

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German bank WestLB is threatening to foreclose on a loan made to the owners of the Versace mansion in South Beach.  The bank holds a $25 million mortgage on the famous property, which is owned by former telecom tycoon Peter Loftin through a company called Casa Casuarina LLC.  In court documents, the bank states that payments have not been made on the loan since January.

The mansion, where fashion designer Gianni Versace was killed at the front gates, has been caught up in legal disputes since Ponzi schemer Scott Rothstein took his great fall, owing his 9.9 percent stake in Loftin’s company. The judge in Rothstein’s criminal case slapped a protective order on the sale – or foreclosure – of the South Beach landmark until its value to Rothstein’s victims could be determined and possibly liquidated.

But prosecutors recently notified the judge they want to relinquish their claim to Rothstein’s interest because it’s worthless.  If that happens, the protective order against the transfer of the property would be lifted. Loftin’s attorneys then notified the court of a third party interest - billionaire, John Paul DeJoria, who has expressed an interest in paying $100,000 for Rothstein's stake.

On Thursday, WestLB fired back with a statement supporting the feds abandonment of Rothstein’s interest.  In that statement, WestLB accuses Loftin of diverting money that should be used to pay back their loan.   The accusation apparently refers to income Loftin is receiving from the lease of the mansion to a restaurant, Villa by Barton G.

And to add salt to the wound, Loftin and his attorney, Adam Steinberg of Miami, have said in e-mails and interviews that they believe WestLB’s mortgage is not valid at all.  They are preparing to file a claim of lender liability against the German bank.

Source:  Biz Journals

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