1 hour ago
3
Libbie received the mansion in divorce settlement with David Mugrabi (Getty images)
A luxury estate in Bridgehampton owned by socialite Libbie Mugrabi is set to go under the hammer after failing to sell through the regular real estate market. The court-ordered auction is scheduled for August 28 outside Southampton Town Hall, with bidding set to begin at $11 million.The auction stems from a legal dispute over a $3.5 million loan that Mugrabi took against the property and did not repay, according to court records. The sale is expected to recover the outstanding loan amount along with related penalties.The property was first listed for $25 million earlier this year. After attracting no buyer, the asking price was cut twice before reaching $19 million. Despite the reductions, the estate remained unsold, leading to the court-approved public auction.
The unsold mansion
The Bridgehampton estate spans around seven acres and includes a 10,687-square-foot mansion. Under the auction terms, interested buyers must purchase the property as is, pay in cash and place a minimum $2 million deposit to participate in the bidding.The mansion became part of Mugrabi's assets after her divorce from billionaire art collector David Mugrabi around five years ago. She received the property as part of a $100 million divorce settlement.
Their divorce drew widespread attention because of a series of legal disputes and accusations between the former couple. Among the incidents reported during the proceedings was a physical altercation over a Keith Haring sculpture valued at around $500,000.
The legal battle
Court documents show that Mugrabi's lender agreed to give her time to sell the property instead of immediately taking possession of it. Under that agreement, the home had to be sold by August 25, with part of the proceeds going towards repaying the loan and associated costs.The arrangement came after Mugrabi and her lawyer challenged an earlier foreclosure auction. During that online Zoom auction, the lender was reportedly the only bidder and acquired the property for $500. Mugrabi's legal team strongly objected to that outcome.The matter eventually returned to court, where a judge approved a new auction process. The latest court order allows the lender to proceed with the public sale after the home's failure to sell through the traditional market.The court order also enforces conditions that Mugrabi had accepted while attempting to sell the estate privately. It further limits additional legal action that could delay the sale and reinforces conditions related to possession of the property.
The estate spans around seven acres and includes a 10,687-square-foot mansion (New York Post photo)
Rare public auction
The auction will be supervised by Daniel Russo, a former Suffolk County assistant district attorney who now works as a personal injury lawyer. He has been appointed by the court as the referee responsible for overseeing the sale.Speaking about the auction, Russo said prospective buyers will submit their bids 'right on the steps' of Southampton Town Hall.Such public auctions are uncommon in the Hamptons, where luxury homes are usually sold through private transactions involving selected buyers. High-value properties in the area are generally marketed discreetly instead of through open bidding.Because of that, the upcoming sale is expected to be unusual for one of New York's most exclusive property markets.
Property still listed
The estate continues to be listed for sale through Daniel Gale Sotheby's International Realty at $19 million. At the same time, Auction.com has been appointed to manage the administrative process for the court-ordered sale.Marketing material indicates that realtor Orit Ofir, who handled the original listing, is also serving as Auction.com's point of contact for the auction.It is not yet clear how the auction proceeds will ultimately be divided.
Last month, Mugrabi's attorney Claude Castro, of Castro Law Group, told the New York Post that Mugrabi continued to hold the deed until the sale was completed.Court filings show that the order authorising the auction was obtained through the lender's legal representatives at Vallely Mitola Ryan.Castro did not respond to requests for comment after the auction was announced. Mugrabi and representatives from Daniel Gale Sotheby's International Realty also did not comment, according to the report.
Impact on sale price
Although the property remains listed at $19 million, the auction is set to begin with an opening bid of $11 million. That difference has led some real estate experts to believe it is unlikely that a traditional buyer will step in before the scheduled auction.Attorney Steven Wallace, who is not involved in the case but has focused on foreclosure and distressed property matters in New York for more than 26 years, said owners often receive less money when properties are sold through court-ordered auctions."Historically, a court-ordered auction throws a major wrench into someone getting more equity out of the sale," Wallace said.If no last-minute private buyer emerges, the Bridgehampton mansion will go under the hammer on August 28.
