Saudi May Gain 20% Control in Marina del Rey : Property: Billionaire brother-in-law of King Fahd would become the area’s biggest developer if a settlement agreement is approved by a federal bankruptcy judge.
A billionaire Saudi Arabian businessman who secretly bought a major stake in Marina del Rey properties almost four years ago is on the verge of becoming the biggest developer in the county-owned marina.
Under terms of a sweeping deal presented Wednesday in federal bankruptcy court, Sheik Abdul Aziz al Ibrahim, a brother-in-law of Saudi King Fahd, would win control of almost 20% of the marina.
The deal, which still must receive approval from U.S. Bankruptcy Judge Calvin K. Ashland, would allow the Saudi businessman to take over a marina real estate empire that includes three hotels, two apartment complexes, shopping centers, offices and more than 1,100 boat slips. The properties are operated on public land through long-term leases with the county.
The settlement, if it is confirmed by the judge later this month, would end a bitter and costly bankruptcy court battle between the Saudi businessman and Marina del Rey developer Abraham M. Lurie.
Of the major players in the long-running bankruptcy case, only Lurie objected to the deal, which would strip him of the marina properties that he has operated since the late 1960s.
Once the marina’s biggest developer and a prominent contributor to state and local officeholders, Lurie has seen his personal and business fortunes sour in recent years. He declined to comment on the deal, which would end his involvement in the waterfront community.
Despite Lurie’s objections, the settlement package was reached after marathon negotiations outside a Los Angeles courtroom between representatives of the Saudi billionaire, attorneys for banks owed more than $140 million on the marina properties and a court-appointed trustee who has been running the marina businesses since July, 1991.
The Bank of Montreal, which had proposed its own plan to reorganize the marina properties, joined in backing the deal. The package would leave Ibrahim in sole control of long-term leases on the marina holdings.
“Today we certainly have crossed a major milestone,” said Abdul Aziz Yahya, president of a Century City-based firm that manages the billionaire Saudi businessman’s extensive U.S. real estate operations. “We look forward to actually completing this transaction. We’re very excited that we will be the owner of these properties.”
Yahya said that negotiations are still under way with Lurie on an undisclosed financial settlement to end their struggle for control of Marina International Properties Ltd.
“We hope that we can come to a resolution with Mr. Lurie,” Yahya said. “We believe we have given him a generous offer. We hope he will respond positively.”
In the meantime, Ashland set an April 20 hearing on confirmation of the compromise plan to reorganize the debts of a bankrupt partnership between Lurie and the Saudi billionaire.
That ill-fated partnership began in August, 1989, when Lurie sold a 49.9% interest in his marina holdings to a secret investor who used shell corporations in Europe, the Caribbean and the United States to buy into the marina.
The Los Angeles County Board of Supervisors, which oversees the harbor, approved the transaction without learning the identity of the investor.
After a three-month investigation, The Times identified the lead investor as Ibrahim, who has close ties to the Saudi royal family.
The Marina del Rey properties were the latest in a string of secret investments by the Saudi billionaire in prime U.S. real estate, including Ritz-Carlton hotels in New York, Washington, Houston, and Aspen, Colo.; a major hotel and office complex near Chicago’s O’Hare International Airport, and undeveloped land near Disney World in Florida.
Ibrahim also has dabbled in Hollywood, investing in the ill-fated movie “Brenda Starr.”
Almost from the beginning, a struggle ensued between Lurie and Ibrahim for control of the marina properties, which include the Marina Beach, Marina International and Marina del Rey hotels, the Admiralty and Islander apartments, Fisherman’s Village, the Marina Beach Shopping Center, Pier 44 and the Marina West offices.
Unable to resolve their differences, attorneys for Ibrahim filed suit in March, 1991, to dissolve their partnership, accusing Lurie of fraud and abuse.
Faced with mounting legal and financial problems, Lurie sought federal bankruptcy protection in June, 1991. His partnership with the Saudis filed for bankruptcy a month later.
The case quickly became a high-priced battleground for attorneys, and legal fees quickly mounted into the millions.
It took pressure from one of the biggest lenders on the marina properties, California Federal Bank, to push the competing forces toward a settlement.
The bank, which has been under pressure from federal regulators to boost its capital and shrink its portfolio of bad real estate loans, pressed hard in recent weeks for a deal that would allow restructuring of its marina loans by the end of the financial quarter. Ashland approved that element of the settlement package late Wednesday afternoon.
