James B. Slemons, the financially ailing car dealer who recently lost his landmark Mercedes-Benz dealership in bankruptcy, has placed another business in bankruptcy to prevent one of his luxury residences in Orange County from being sold today at a foreclosure sale.
Slemons Investments, a firm that owns the 10,000-square-foot home in Newport Beach's exclusive Harbor Ridge community, on Thursday filed for protection from creditors under Chapter 11 of the Federal Bankruptcy Act.
The filing in U.S. Bankruptcy Court in Santa Ana halts this morning's scheduled foreclosure sale of the 20-month-old home at 31 Ridgeline Drive.
Slemons Investments also owns the Newport Beach property and buildings of the former Slemons Imports dealership, which was the first Mercedes-Benz dealership in Orange County.
That property is being leased by Fletcher Jones Motor Cars, which acquired the Slemons Imports franchise and most of its assets for $11.5 million in a bankruptcy sale completed last month.
Slemons, who was one of Newport Beach's most flamboyant big spenders, lived in the Harbor Ridge home for more than a year before moving out in August and listing the property for sale.
On Thursday the home was still listed, at an asking price of $3.69 million.
Slemons owns at least one other residence, a condominium, in Newport Beach.
On Aug. 27, shortly after Slemons moved out of the larger home, declaring that he had built it as a speculative investment, American Savings Bank in Fresno filed a default notice in the Orange County recorder's office, saying Slemons had stopped making payments on the home in June.
American Savings loaned Slemons $2.7 million on the home in July, 1990.
As of Thursday, the mortgage payments were in arrears by about $200,000. A spokeswoman for the thrift said the minimum bid at the foreclosure sale--if it had gone ahead--would have been $2.9 million.
The thrift lists Slemons as the property's owner, but the bankruptcy filing shows that ownership at some point was transferred to Slemons Investments.
In addition to the first trust deed held by American Savings, the Harbor Ridge property is subject to a second trust deed held by Tokai Credit Corp. of Pasadena, which used all of Slemons real estate holdings to secure a $15.1-million business loan to Slemons Imports in October, 1990.
It was 10 months later that the now-defunct dealership filed for bankruptcy.
Slemons, who once was the nation's third-largest Mercedes-Benz dealer in total dollar volume and whose six new-car franchises and Mercedes-Benz parts business made him one of the nation's largest automotive retailers, has sold or closed most of his businesses in the last year.
He currently owns a Volvo dealership in Hawaii and a Jeep-Eagle dealership in San Clemente.
Slemons also owns, either personally or through his various businesses, homes in Honolulu, Big Bear, Palm Springs, Newport Beach and Avalon.