Versace Mansion In Bankruptcy, Mortgage Holder Says ‘Fraud’ [Video]

The Versace mansion in South Beach, Miami will be going up for auction by the US Bankruptcy Court in Miami on September 19. If you press that magic button, you can hear Bloomberg bankruptcy expert Bill Rochelle talk about the upcoming auction.

As The Wall Street Journal reported, the owners of the Miami Versace mansion called Casa Casuarina filed for chapter 11 bankruptcy protection on July 1.

CBS Miami named the Versace mansion owner as Peter Loftin.

According to their report, Loftin bought the property for $19 million roughly ten years ago.

He has since fallen behind in payments and tried to sell it for as high as $75 million. However, as The Inquisitr previously reported, there haven’t been any takers.

The new bankruptcy filing will block the mortage holder VM South Beach LLC from placing the house in foreclosure.

The notorious Versace mansion rose to notoriety in 1997, when celebrity Italian fashion designer Gianni Versace was murdered on his doorstep there at age 50.

Rochelle says in the video that Casa Casuarina was originally designed as a copy of a Christopher Columbus mansion in Genoa, Italy. WSJ reported that it’s actually a copy of a mansion commissioned by Columbus’ son in the Dominican Republic. Either way, it’s spectacular.

Want a peek inside? Here’s a video that takes you on a partial tour:

Despite its beauty, the troubled Casa Casuarina property has been embroiled in multiple legal entanglements that may have many potential bidders steering cleer.

Miami judge Laurel M. Isicoff said Monday that she will listen to evidence next week about whether or not to appoint a trustee for the mansion. According to Law 360, VM South Beach is still owed $31.5 million on their mortgage — secured by the Versace mansion which they say is now underinsured.

Their rather angry trustee motion said in part:

“It is inescapably clear from the totality of the circumstances that Casa’s and Mr. Loftin’s prepetition conduct rises to the level of fraud, dishonesty, incompetence or gross mismanagement.

“Casa and Mr. Loftin have created a situation where the property and the bankruptcy estate are at risk of immediate and permanent harm through the occurrence of an uninsured or underinsured loss, an intrusion resulting in theft or destruction of the contents of the property, or an injury to the property’s current residents.”

Stay tuned. For now, the ultimate fate of the bankrupt Versace Mansion is up in the air.

[Versace mansion photo by meunierd /]