Lurie Ends Attempt to Refinance Marina : Real estate: The developer withdraws his bankruptcy proposal. A Saudi billionaire is likely to gain control of 20% of the county-leased properties.

In a move that could end his involvement in Marina del Rey, developer Abraham M. Lurie withdrew a bankruptcy reorganization plan Wednesday, enhancing chances that a billionaire Saudi Arabian businessman will end up controlling almost 20% of the marina’s properties.

Attorney Jeffrey Greenberg told U.S. Bankruptcy Judge Calvin K. Ashland that Lurie was withdrawing his plan to reorganize the marina properties after financing for the plan collapsed.

The move effectively removes Lurie as a major player in a long-running and bitter battle for control of the real estate empire that he has dominated since the late 1960s.

“I’m very disappointed,” Lurie said outside the bankruptcy courtroom.

Now only Saudi Arabian businessman Abdul Aziz al Ibrahim and the Bank of Montreal remain in contention for control of three hotels, two apartment complexes, shopping centers, office buildings, restaurants, and more than 1,100 boat slips in the marina.

Like the rest of the marina, all of the properties are operated on public land under long-term leases with Los Angeles County.

Ibrahim, a brother-in-law of Saudi King Fahd, heads a trio of Saudi investors who became Lurie’s business partners in a secrecy-shrouded deal approved by county supervisors in August, 1989. Almost from the start, their partnership has been plagued by financial trouble and deep differences that eventually led to the bankruptcy proceedings.

The withdrawal of Lurie’s plan marks the end of a era. Long a prominent figure and major contributor to political campaigns, he was the largest leaseholder in the marina.

His properties generated several million dollars a year in rent for the county. But at times he failed to make property tax, rent and loan payments. In recent years, he allowed the properties to decline, and he has never built on the last piece of waterfront land in the marina.

Neither the Saudi plan nor the Bank of Montreal proposal contemplates any role for Lurie in the reorganized marina properties.

A final decision on who will emerge with the marina holdings is not expected until next month after Judge Ashland concludes a hearing on the competing reorganization plans. Lurie intends to oppose both plans, which would eliminate his interest in the marina.

But Joseph A. Eisenberg, attorney for the Saudis’ Marina Group of Companies, said Lurie is not likely to end up with any stake in the marina. “I would think the chances are remote at best,” he said.

Eisenberg said it has been clear for some time that Lurie’s reorganization plan lacked substance or credibility because his financing was in doubt. “Today’s withdrawl confirms what all of the parties believed,” he said.

On the second day of a crowded bankruptcy court hearing, the Saudi plan had the support of the county and most major creditors of the bankrupt Marina International Properties Ltd. with the exception of Bank of Montreal.

The proceedings are being closely watched by a phalanx of attorneys representing the county and a group of banks that together have more than $140 million in unpaid loans on the marina properties.

With real estate values depressed by the recession and the deteriorated condition of the properties, initial appraisals put the value of the leaseholds at between $111 million and $126 million.

By far the biggest loser could be the Canadian bank, which is owed more than $54.6 million on the Marina Beach Hotel, almost double what appraisers believe it is worth.

Attorneys for the Bank of Montreal have been mounting a vigorous challenge to the Saudi reorganization plan since the bankruptcy court hearing began Tuesday.

But Eisenberg is optimistic that Ibrahim will emerge the winner. “The properties and the marina have suffered long enough,” he said. “We are anxious to get this out of bankruptcy. We are urging the quickest possible confirmation of the plan.”

In testimony Tuesday, Abdul Aziz Yahya, president of Newfield Enterprises International, a Century City firm that manages Ibrahim’s U.S. real estate holdings, said the Saudi businessman would be the sole owner of the reorganized marina properties under their plan.