Financial Woes Hit Home for Strapped Slemons : * Bankruptcy: A month after agreeing to sell flagship Mercedes-Benz dealership to pay off debt, the former big spender is hit with a default notice on his posh Newport Beach residence.
The financial problems plaguing Mercedes-Benz dealer James B. Slemons, once one of this beachside city’s most flamboyant big spenders, appear to be mounting.
A month after placing his flagship Jim Slemons Imports Mercedes-Benz dealership into bankruptcy and stressing that the action did not involve his personal holdings or any of his other businesses, Slemons has been hit with a default notice from the bank that financed his multimillion-dollar home in the exclusive Harbor Ridge section of Newport Beach.
The notice, filed by American Savings Bank in Fresno, says that Slemons stopped making payments in June and as of Aug. 23 owed the thrift $76,437 on the $2.7-million first trust deed.
The default notice was filed Aug. 27 with the Orange County recorder’s office in Santa Ana.
Slemons moved into the 10,000-square-foot home on Ridgeline Drive in April, 1990. In an interview two months ago he said he was moving into a smaller condominium, explaining the Ridgeline Drive residence was built as a speculative investment.
The home, which has a pool, a wine cellar and offers views of Santa Catalina Island, has been listed for sale for several months at $5.3 million. Some local realtors have said privately that $3 million would be a more reasonable price in today’s depressed market.
Slemons and his wife, Tajah(, reportedly were out of town and could not be reached for comment.
The car dealer earlier this week announced that he had reached an agreement to sell the Mercedes-Benz franchise for $11.5 million in cash and notes in order to pay off the dealership’s biggest creditor, Pasadena-based Tokai Credit Corp.
Tokai holds a second trust deed on the Ridgeline property, which Slemons used to help secure a $15.1-million business loan in October, 1990. In addition to the Harbor Ridge residence, Slemons pledged all of his Southern California business and personal properties as security for that loan.
In April, Slemons refinanced most of the properties, including the home, to secure two loans totaling $11.8 million from Sumitomo Bank of California.
Documents filed with the county recorder’s office in May show that Tokai agreed to subordinate its claim on the properties in favor of Sumitomo. That would leave the the Pasadena lender third in line behind American Savings and Sumitomo to receive any proceeds if the Ridgeline Drive residence was sold in a foreclosure sale.
No sale has yet been scheduled. Under state law, Slemons has 90 days to cure the default and avoid a foreclosure.
In addition to the Ridgeline Drive home and two other Newport Beach residences, Slemons, either personally or through his businesses, owns homes in Honolulu, Big Bear, Palm Springs and Avalon.
Slemons, whose Jim Slemons Imports reported $110.2 million in sales last year to rank as one of the nation’s largest Mercedes dealerships, also owns a custom-built, 83-foot motor yacht, the Mercedes, which is up for sale for $3 million.
