For the New York socialite Libbie Mugrabi, a grand $100 million only seems to go so far.
Mugrabi, who got that stack in her fractious divorce from the billionaire art collector David Mugrabi, is trying to hold onto her Bridgehampton mansion after not paying anything on its $3.5 million mortgage.
Her efforts to get the 7-acre estate back free and clear last week led to the property hitting the market for $25 million in a complex arrangement with her lender that includes contingencies if she declares bankruptcy.
While selling a house to get its deed back is unconventional, it’s pretty much how Mugrabi rolls. In New York alone, she has been involved in 15 lawsuits over the last five years, court records show.
A shell company affiliated with REO Assets of America of Great Neck, N.Y. sued Mugrabi over the Bridgehampton property after she didn’t keep up with mortgage payments. The company specializes in liquidating distressed real estate properties, with the REO in its name standing for “real estate owned.”
The sale agreement doesn’t give Mugrabi wiggle room. The estate, at 486 Middle Line Highway, must be sold by Aug. 25. If it does find a buyer, Mugrabi must pay the lender $5.5 million, plus $2,333 per day in interest and any penalties, court documents say.
If there is no buyer, Mugrabi can’t fight the property being foreclosed upon and herself being evicted, the accord states.
Prospective buyers may watch the Aug. 25 deadline closely to see if any desperation kicks in between now and then and the property’s price is cut. That may be okay, though. The estate is currently priced “at the high end” of its range, Mugrabi told The Post.
And anything is better than the $500 her lender paid for her deed in a Zoom auction when Mugrabi fell behind in payments.
By selling the Bridgehampton property, Mugrabi is letting go of one of the most expensive assets she got in her divorce five years ago. The split, called one of the nastiest in New York, featured an array of accusations, including the pair physically fighting over a $500,000 Keith Haring sculpture.
The game plan for the Bridgehampton home does not include fisticuffs.
It aims to get the property sold at as full a price as possible, with Mugrabi using the proceeds to pay off the loan and penalties, get the deed back and transfer it as owner to the buyer, her attorney Claude Castro of Castro Law Group, said.
Mugrabi is coming into the arrangement with a clean slate, so to speak. “I never paid a thing” on the mortgage, she said, adding she doesn’t necessarily have to use the sale proceeds for the payoff.
As originally structured, the loan carried a 6.65% interest rate through an entity affiliated with REO Assets of America.
After Mugrabi defaulted, the affiliate bought the property last year for $500 at a Zoom auction, at which it was the only bidder. The Bridgehampton estate was valued between $12 million and $18 million at the time, property records show. While sales of defaulted properties are regularly done at deep discounts, the 99.997% markdown to $500 is quite steep.
The way the auction was handled is one of the issues Mugrabi cites in her court filings and is part of an overall process she characterizes as “fraud,” among lots of other descriptors.
This is not Mugrabi’s first legal tussle involving her residences. Two years ago, a Manhattan judge ordered her to pay $1.8 million to cover back rent and utilities on an opulent Yorkville home she had occupied.
That dispute involved a $28,800-a-month East 82nd Street condo. Mugrabi says the judge’s order has since been rescinded, although a search for legal filings related to that decision didn’t show any results.
For the Bridgehampton property, if Mugrabi files for bankruptcy before the Aug. 25 deadline, a clause allows the lender to bypass standard bankruptcy protections and take immediate action, including foreclosure and eviction.
The clause is included in more than 1,000 pages of claims and counter claims as the case ambled its way through Suffolk County Supreme Court over the past two years.
She added that she never saw the pink auction notices that a processor said in testimony he put on the “front door and all of the home’s other entrances and exits.”
The lender says in its legal filings that it acted according to the law every step of the way. The company’s attorney, Ryan Mitola of Vallely, Mitola and Ryan, declined to talk about the case, saying he was not authorized.
The lawsuit includes Mugrabi’s demand for $15 million as a way of recouping costs already associated with the case, including default interest levied at 25% a year, plus huge legal fees.
That $15 million claim is now off the table as the two sides try to settle, and both sides have agreed to pay their respective attorney’s fees.
Amid the cacophony of legal filing sits an East End property that is actually rather pastoral.
For the $25 million, the buyer gets a 17-room luxury home that stands amid acres of rambling lawns surrounded by woodlands.
The 10,687-square-foot spread includes six bedrooms, a similar number of bathrooms and several fireplaces.
Lofty ceilings, glass walls and high-end flooring mark its interior. A theater, a climate-controlled wine cellar, a library and an office are all within.
Outside, a pool and spa, a pool house, two pickleball courts and another sports court tuck into a resort style layout.
Once the claims involving the estate are all settled, Mugrabi says she is moving away from New York, and all the “hardships” she said she has experienced here. “It’s over and out for me,” she said.
But the judge in the case, David Reilly, indicates Mugrabi might want to hold off packing her bags.
While pleased that the two sides have come up with a plan, “I’m going to be more pleased when I hear that it actually worked,” Reilly said.
