The mansion has a pink exterior, covers 10,000 square feet, has a marble-laden interior, a large gourmet kitchen, spas, saunas and a ballroom-size living room. It also has a posh address in Encino, located in the Clark Gable estates area, just around the corner from convicted junk bond king Michael Milken.
The house belonged to Mike Glickman, the former San Fernando Valley real estate phenom who filed for personal and corporate bankruptcy liquidation in June. And, after five months on the market, the house still hasn't sold. Glickman knows something about the problems of a slow housing market.
Glickman Realty's bankruptcy filing was blamed in part on the declining real estate market, which couldn't support his company's high overhead and free-spending ways.
Now the increasingly troubled market is thwarting efforts to sell Glickman's Encino estate and slowing the process of collecting assets to repay the hundreds of Glickman Realty creditors.
Donald Henry, the court-appointed bankruptcy trustee handling the Glickman case, recently lowered the asking price for the Encino house from $2.995 million to $2.495 million.
A peek at Glickman's personal bankruptcy papers shows personal debts of $3.45 million and assets of $3.06 million. But the asset total includes an estimated market value for the Encino property of $2.75 million, well above the current asking price. Glickman's personal holdings also include a Malibu condominium with an estimated market value of $550,000 and an interest in two race horses.
Because Glickman was the sole owner of his company and personally guaranteed many of the company's debts, most of the corporate debts are also part of his personal bankruptcy.
Glickman, 30, started Woodland Hills-based Mike Glickman Realty in 1983 and quickly built the company into the Valley's largest real estate brokerage. At its peak, Glickman had seven offices and about 1,800 agents working for him. But when the real estate market started to soften last year, Glickman's ambitious expansion into the Westside, high overhead and generous commissions to agents sent the company into a tailspin.
Since filing for bankruptcy, Glickman has been working for former rival Jon Douglas Co. as executive director of Douglas' estates division in the Valley, which handles sales of million-dollar homes. But Douglas said that was "just a title," and Glickman has been working mostly like anybody else, listing houses for sale and trying to find as many buyers as he can.
"It's a whole different type of lifestyle," said Glickman. "Six months ago I had a 10,000-square-foot house on a gated property. I had race horses running. I had a company."
Although Glickman's earnings this year will likely be a far cry from the $2.81 million he earned last year, according to court papers, he'll hardly end the year penniless. Bankruptcy documents filed in August list Glickman's take-home pay from Douglas at $6,667 a month, and his monthly expenses at $10,667. But that was before he earned any commissions on house sales.
Glickman has been busy since he started working for Douglas. He said he has listed 160 houses and condominiums in the Valley and on the Westside with prices ranging from $100,000 to $2.2 million. In the past month, he said, he has closed sales on 11 of them, and he has a sales-to-listing ratio about par with the Board of Realtors average.
The listing office usually earns half of a 6% commission on a real estate sale. Of that 3%, Douglas pays his sales agents 60% to 70%.
Now that the price on Glickman's Encino estate has been lowered, White House Properties agent Michael McCall, who is handling the property, says interest in the house has picked up and he expects to present an offer to the bankruptcy trustee today.
If trustee Henry approves the offer, a waiting period would be assigned by the court in case there are objections to the sale, and a hearing would be held. If there are no complications, Henry said, it's likely that escrow would close by mid-December.
Unfortunately, even if the house is sold, it would be little consolation to Mike Glickman Realty's unsecured creditors. That's because Wells Fargo Bank, which holds a $2-million first trust deed on the property, is first in line to get its money back.
Wells Fargo has already made initial moves to try to foreclose on the property. According to bankruptcy documents, the mortgage on the estate costs $1,000 a day in interest alone and Wells Fargo has received no payments since the bankruptcy filing.
After Wells Fargo is repaid and other costs of the sale are covered, said Encino attorney Jeffrey Slott, who is working on the bankruptcy, "it's not likely there would be much" left.
A final decision has not yet been made about whether Glickman will be able to keep the Malibu condominium where he has been living. However, Henry said the preliminary determination was that there would not be enough equity in the property to make a sale worth pursuing.