A wealthy widow is fighting the foreclosure sale of one of the country’s most notable homes.
The 60-room Casa Encantada in Los Angeles, constructed in the 1930s and called home by a series of American moguls, was once the most expensive home in the US.
It is now set to be auctioned off behind a public fountain.
Karen Winnick, 79, became the primary steward of Casa Encantada after the 2023 death of her husband, businessman Gary Winnick.
In a cross-complaint filed in in Los Angeles Superior Court on Tuesday, Karen and her son Alexander allege she was left “effectively destitute,” by a malicious loan-to-own scheme against her prized home and other family assets.
The Wall Street Journal first reported on the filing, adding the sale will take place on Dec. 16.
The catalyst of the looming foreclosure auction is a massive loan taken out by Gary in 2020 — the terms of which Karen claims she was unaware.
Karen, a children’s book author and president of the Los Angeles Zoo Commission, stands to lose her home, her life savings and even her wedding ring, according to filing. Collateral included family artwork, furniture, antiques and jewelry. Another home in Malibu jointly owned by the Winnicks’ three sons is also slated for auction.
The cross-complaint seeks to stave off the auctions and accused lenders CIM Group, a major commercial developer, and several of its associates of concealing information, financial elder abuse and transfer of property without spousal consent.
The late Gary Winnick once numbered among Los Angeles’ wealthiest residents. He made billions as the founder of fiber-optic cable network builder Global Crossing. The company spiraled into debt in the early 2000s and filled for bankruptcy in 2002.
In 2000, before it all came crashing down, Winnick made his fateful, record-setting purchase of Casa Encantada for $94 million.
Casa Encantada hit the market for $250 million in 2023, five months before Gary’s death. It was most recently listed for $190 million until it was pulled off the market last month. Gary was under “significant financial demands,” according to the cross-complaint, and previously turned to his “decades-long friend,” CIM Group co-founder Richard Ressler, for help.
CIM called the allegations “fantastical,” in opposition documents filed on Wednesday.
CIM Group issued Gary an initial $100 million loan in 2020, according to court documents.
CIM filed a notice of sale on both Casa Encantada and the Malibu property in September, alleging the family had fallen behind on payments.
The Winnicks’ lawyers claim Ressler was “looking to make a killing for himself and his company,” with the initial $100 million loan, designed to accumulate interest “which would quickly balloon and cripple even the wealthiest people on earth.”
The debt has ballooned to more than $155 million.
Karen claimed all she saw of the loan was stand-alone signature pages, and her lawyers assert she lacked the financial know-how to know what was going on.
CIM said she did.
The group’s Wednesday filing claimed Karen drew advances from the loan agreement following her husband’s death, which they say signaled her understanding of its contents.
The commercial developer’s portfolio includes 432 Park Ave. on Manhattan’s Billionaires’ Row — another high-profile building under intense scrutiny.
A CIM spokesperson and Karen’s attorney, Amjad M. Khan, could not be reached by press time.
CIM claims the auctions should go ahead, despite the family’s insistence that they’ve found a buyer who could pay off a substantial portion of their debt. CIM claimed the Winnicks’ deal is for $130 million — less than their valuation of the historic property.
Before his death, Gary hired celeb designer Peter Marino to restore the famous home’s interiors to their former Deco Hollywood glory.
The luxurious residence, which spans 40,000 square feet and includes seven bedrooms, features hand-lacquered dining room walls, a walnut-paneled library and an Art Deco-inspired living space.
Casa Encantada’s prior owner, billionaire businessman David Murdock, purchased the home following the death of yet another magnate-owner, Conrad Hilton. The hotelier who once called the mansion “The House Where Dreams Come True.”
The 8.4-acre property features a swimming pool and a tennis pavilion and overlooks the Bel Air Country Club golf course.
The foreclosure auction for Casa Encantada is set to take place behind a fountain in California’s Civic Center Plaza.
Jimmy Heckenberg of Rodeo Realty, the family’s current listing agent, declined to comment.
The post Inside the battle for a $190M LA megamansion — whose owner claims she was duped out of the property by a loan-to-own scheme appeared first on New York Post.
