REVEALED: Incredible spending habits of LA's 'richest billionaire' who died broke after buying $250m mansion so huge walking around it left him out of breath | Retrui News | Retrui
REVEALED: Incredible spending habits of LA's 'richest billionaire' who died broke after buying $250m mansion so huge walking around it left him out of breath
SOURCE:Daily Mail
Gary Winnick was once worth $6.2 billion, but died with more than $150 million in debt after spending his fortune on a lavish lifestyle that he did not have the cash flow to support.
A billionaire tycoon who was once Los Angeles's richest man died broke after buying a $250 million mansion so enormous that walking around it left him out of breath and and hiring a team of 250 skilled tradesmen to renovate it.
Gary Winnick, 76, purchased his 40,000 square-foot Casa Encantada estate for $94 million in 2000, making it the most expensive home sale in the United States on record at the time.
He then blew tens of millions of dollars on a nearly three-year renovation, overseen by star architect Peter Marino, to restore the historic 1930s Bel Air mansion to museum-level standards, the Wall Street Journal reported.
An admirer of Great Gatsby-style homes, Winnick employed more than 250 workers to revamp the property, including eight artisans from Paris whose only job was to lacquer wood walls. Also hired were a group of plaster craftsmen who worked on the Bellagio Hotel in Las Vegas and who helped fill Winnick's home with opulent molding.
Winnick tracked down a dozen of the original furniture pieces that had been designed for the home and purchased them for a 'great expense.' He also outfitted the mansion with historic works of art, including a portrait of George Washington that had been commissioned by Benjamin Franklin.
He dined at lavish restaurants with large groups, ordered every item on the menu and always picked up the check, according to his former business partner. He was known to frequent elite private members clubs and was reportedly a top donor within his philanthropic circles.
The telecommunications boss - once worth $6.2 billion - was so rich and successful that he gave his longtime housekeeper stock in his company and she became a millionaire herself, the LA Times revealed in 1999.
But Winnick died in 2023 with more than $150 million in debt after taking out a massive loan three years prior that his widow alleges had unfavorable terms and was taken out without her consent.
Gary Winnick (pictured with his wife Karen in 2018) was once worth $6.2 billion, but died with more than $150 million in debt after spending his fortune on a lavish Los Angeles lifestyle that he did not have the cash flow to support, it has emerged
The couple purchased their sprawling estate, known as Casa Encantada, for $94million in 2000, making it the most expensive home sale in the United States on record at the time
Winnick was once the richest man in Los Angeles, having founded fiber-optic cable network Global Crossing.
The company imploded in the early 2000s, after making him a billionaire.
The newfound wealth allowed him and his wife Karen to acquire Casa Encantada, which Winnick had first visited in 1988 when it was owned by David Murdock.
Murdock had been hosting a fundraiser for George H.W. Bush.
After the Winnicks took control of the seven-bedroom property, they too used the grand estate as a place to host numerous political fundraisers and charitable events.
Winnick hosted events for the Museum of Modern Art, donated millions to institutions such as the Los Angeles Zoo, maintained close ties with President Bill Clinton and hosted events with several politicians including Arnold Schwarzenegger.
Around the same time they purchased Casa Encantada, the couple bought a two-bedroom apartment at the Sherry-Netherland Hotel in New York City and hired another star architect to redo it. They also owned a beach house in Malibu.
Winnick appeared to live an opulent life, but had actually been struggling with finances for over 20 years, the WSJ reported.
His company went bankrupt in 2002 when the dot-com bubble burst. But Winnick cashed out $730 million in stock before the collapse - a move that resulted in a slew of shareholder lawsuits that saw him pay $55 million to settle.
He was a serial investor and poured funds into a slew of media and technology companies, including several startups that collapsed and ended in legal battles.
The couple listed the expansive property, which boasts seven bedrooms, a swimming pool and tennis pavilion, for $250 million in 2023, shortly before Gary Winnick's death
Winnick hired a star architect to restore the home to museum-level standards and outfitted the estate with historic and award-winning works of art
But his financial struggles appeared to reach an all time low in 2020, when Winnick borrowed $100 million as part of a 'loan-to-own' scheme.
He put up the Casa Encantada mansion, which is now worth $250 million, the property in Malibu, and an assortment of prized familial possessions as collateral for the loan.
Karen claimed she only learned about the loan - which she said will leave her 'effectively destitute' - after Winnick's death and is now in a bitter battle to keep their historic LA home.
Karen, 79, has since claimed she was not privy to the family's financial struggles and has accused CIM Group of setting her late husband up.
'Gary managed our household finances. I was unaware that, in the years prior to his death, he faced significant financial demands,' she wrote in court documents filed last month and obtained by the WSJ.
'I did not know, until Gary passed away, that we were overextended and that Gary needed money to repay debts and maintain his lifestyle.'
Karen has accused CIM's co-founder and Gary's longtime friend Richard Ressler of preying on Winnick when the elderly man sought him out for help.
According to the court filing, the $100 million loan was designed to amass 'an accumulation of interest which would quickly balloon and cripple even the wealthiest people on earth.' It has since ballooned to $155 million.
The interest on the loan Gary received had a variable rate that never dropped below 9.55 percent.
In addition to putting their properties up as collateral, Winnick also listed artwork owned by the family, furniture, antiques, jewelry and Karen's wedding ring.
The former billionaire allegedly used the home (pictured), as well as a second property, as collateral in a new $100million loan issued in 2020, and Winnick claims her late husband did so without her knowledge
Karen has claimed that she was not privy to the family's financial struggles, alleging in her lawsuit that 'Gary managed our household finances. I was unaware that, in the years prior to his death, he faced significant financial demands' (Pictured: Gary Winnick in 2015)
Karen and one of her sons are seeking a jury trial as they accuse CIM of financial elder abuse, transfer of property without spousal consent and fraudulently concealing information, according to court filings.
CIM filed legal opposition documents in which they branded the allegations 'fantastical.'
Karen argued the loan required spousal consent and that she never agreed, nor was she informed, of the terms of the loan.
The filing did, however, acknowledge that she received individual signature pages, but that she 'did not possess the financial sophistication necessary to understand the nature of financing and loan agreements.'
CIM argued Karen was able to draw advances from the loan after her husband's death, which indicates she was aware of the agreement.
CIM filed a notice of sale for both properties used as collateral back in September, alleging the family had fallen behind on loan repayments.
The properties were due to be sold at auction in mid-December, but Karen's lawyer succeeded in securing an emergency stay until the case can be reviewed by a court of appeals judge.
The couple listed Casa Encantada, which boasts seven bedrooms, a swimming pool and tennis pavilion, for $250million in 2023, shortly before Winnick's death.
Gary Winnick, Michael Crichton and Karen Winnick attend a benefit for the Los Angeles Public Library Foundation in February 2003
The home was recently relisted for $190million.
Karen claimed in early December that she found a buyer for the property, but the deal cannot progress because CIM had a claim on the home.
CIM argued the property should be auctioned and that the $130million asking price Karen has negotiated with her buyer is well below their valuation.
The couple's Malibu beach house is now owned by their three sons.