Newport Coast, the stretch of California between San Diego and Los Angeles, is one of the most coveted places to own property in the world, claiming Tiger Woods, John Wayne, and Shirley Temple as past residents. And these are just a few examples of the exclusive nature of living in this particular area of the country. However, one piece of property there, once valued at around $87 million, will soon be sold at a bankruptcy auction.
The property broker who set out the vision for the large Tuscan-style villa on the biggest parcel of residential real estate on the Newport Coast filed for Chapter 7 bankruptcy in April of 2011. Once spectacularly wealthy, he was one of the many victims of the real estate bubble burst.
The 12.5 acre property and the mega mansion sitting upon it are expected to fetch around $22 million at auction, a quarter of its original value. The agent responsible for the sale said over 700 people had attended an open house and dozens had registered as bidders for the auction.
As mentioned in previous posts, Chapter 7 bankruptcy is meant to liquidate a filer's assets, except for possessions labeled as exempt under the bankruptcy code. The sale of the filer's assets by a bankruptcy trustee is intended to pay off the filer's creditors and put the filer on the path toward a financial re-start.
The mansion owner in this case listed assets of about $2.36 million when he filed for Chapter 7. The filing indicates that he owes approximately $50 million to some 200 creditors.
Filing for Chapter 7 bankruptcy can be confusing, and also difficult to accept. But those interested in learning more should remember that this type of bankruptcy is a tool for the consumer, and many times can be the best option in a bad financial situation.