By E.B. Solomont and Katherine Clarke
PONOMA, CALIF. — Casa Encantada, a storied Los Angeles estate at the heart of a contentious foreclosure battle following the death of telecommunications mogul Gary Winnick, has sold at auction for $130 million.
The buyer's identity couldn't be learned.
Casa Encantada was the longtime Bel-Air home of Gary and his wife, Karen Winnick. The property and another home in Malibu were used to back roughly $155 million in loans that entities associated with Gary took out starting in 2020. Lender CIM Group, which was co-founded by Gary's longtime friend Richard Ressler, filed a notice of sale on both properties in September, alleging that the Winnicks had defaulted on loan payments.
Gary died in 2023. In court papers, Karen has alleged that CIM orchestrated a "loan-to-own scheme" that threatened to leave her "effectively destitute" and strip her of her home and life savings. She said she was unaware of the terms of the loan until after her husband's death.
She requested a temporary restraining order to block the auction, but it was denied by a judge in California Superior Court. Her appeals delayed the auction from December to July.
The sale took place behind a fountain at Pomona's nondescript Civic Center Plaza, about 30 miles east of L.A. At 11 a.m., court auctioneer Anna Haley, clad in denim pedal pushers and a baseball hat, plopped herself down in a foldable camp chair. A small group gathered, including representatives for CIM and a blond man dressed in black, who had come to bid on Casa Encantada. The bidder declined to identify himself to The Wall Street Journal.
At 11:44 a.m., the auctioneer announced an opening bid of $125 million for the Bel-Air estate. CIM and the black-clad man bid up in $1 million increments, reaching $130 million. "Going once," said Haley. "Going twice."
Turning to the blond man, she said, "You need to pay me so I can say 'sold.'" He opened a cardboard envelope and handed her several cashiers' checks.
"I don't know that I've ever sold anything for $130 million before," Haley said.
The Malibu home, which had been given to the Winnicks' three sons, will revert to the lender after it submitted a $20 million credit bid at the auction. The Winnicks had owned the seven-bedroom, circa-1930s beach house for two decades.
Amjad M. Khan, a lawyer for Karen, said in a statement before the auction: "CIM has characterized these properties as 'trophy mansion properties' in court filings. Ms. Winnick sees them differently. For her, this case has never been simply about real-estate assets; it is about ensuring that the legal rights and protections she believes apply under California law receive a full and fair merits review."
Reached after the auction, Khan declined to comment further.
The auction is the latest twist in a saga that shocked Los Angeles, including many of the Winnicks' close friends, who assumed they had vast financial resources. Gary was the founder of telecommunications company Global Crossing. Its rise made him a billionaire before the company filed for bankruptcy in the wake of the dot-com bubble.
The Winnicks bought Casa Encantada for $94 million in 2000. It was the priciest U.S. home-sale on record at the time.
It is rare for a property of this magnitude to end up on the auction block, according to industry insiders. The Winnicks listed the property for a potentially record-setting $250 million in June 2023, a few months before Gary's death. It was most recently listed for $190 million.
Write to E.B. Solomont at eb.solomont@wsj.com and Katherine Clarke at Katherine.Clarke@wsj.com