Versace mansion set for bankruptcy auction

07/17/2013 3:01 PM

07/17/2013 4:03 PM

The former Versace mansion is set for sale in a bankruptcy auction later this summer as one-time owner Peter Loftin prepares to end his stormy tenure at the famed Ocean Drive property that got caught up in the Scott Rothstein scandal.

A lender owed $32 million on the 20-room property has the right to take the manse for that amount during the Sept. 17 auction. But Loftin and creditors hope to get closer to $75 million, which is the latest listing price from Loftin in his effort to find a buyer for the property. Fashion icon Gianni Versace was murdered on the steps outside his lavish private home in 1997, and the crime scene remains one of the most photographed spots on South Beach.

Despite the notoriety of the cloistered compound on one of the most famous streets in South Florida, Loftin struggled to turn a profit at the property. The one-time telecomm magnate purchased it from Versace’s heirs in 2000 for $19 million, and he initially kept it as a private residence. But he later began looking for revenues, first inviting the wealthy to join a private club formed on the property and then opening a hotel and restaurant there.

Rothstein was brought in to turn around the property and launch a nightclub and Italian restaurant there, but soon federal marshals were on site amid Rothstein’s crumbling Ponzi scheme. In the wake of the Rothstein scandal, Loftin turned to a high-profile Miami caterer and restaurateur, Barton Weiss, to try and jumpstart the mansion as a hotel and event space.

Weiss pulled out of the property in May, citing fallout from a two-year-old foreclosure fight between Loftin and Loftin’s lender. That fight should cumulate with the Sept. 17 auction. A Loftin entity filed for bankruptcy July 1 and a judge this week approved selling off the estate’s primary asset: the Versace mansion and its furnishings. The lender, VM South Beach, can take possession of the property for as little as $24 million, but also will have the option of swapping its $32 million claim for the property if no buyer is willing to go higher.

Only bidders able to put up a $3 million deposit will be allowed to participate, said Lamar Fisher, CEO of the Fisher Auction Company, which will be managing the court-ordered sale. If weather allows, the auction will be held by the mansion’s tiled pool, Versace lined with gold.

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