Many in the receivership community, as well as the general public, are familiar with the now-famous story of the “Hadid House” in greater Los Angeles. Mohamed Hadid, known both for his work as a luxury real estate developer and for the high profiles of his family members, embarked several years ago on a major single-home construction in Bel Air, California. After a series of allegations and lawsuits regarding safety and code violations around the home’s partially-completed construction, a Los Angeles Superior Court appointed Douglas Wilson as receiver to oversee the demolition of the construction.

The assignment, due to its highly public nature, the numerous stakeholders involved, and the unusual state of the real estate, required some very creative approaches. Today, the demolition and hillside restoration is nearly complete, with a new owner in place to develop the site.

Ultimately, it is a timely example of the critical role

receivers play in developing solutions to complex problems, and the tools we have available to effectively complete our assignments.


In 2011, Mr. Hadid purchased the 1.22-acre parcel of land in Bel Air, California, and embarked on a plan to build a 14,000-square-foot mansion on the hillside property. Several years into the design and construction of the home, neighbors began to question the construction relative to city code as the structures grew to 4 stories and 30,000 square feet, and subsequently raised their concerns along with formal claims.

A series of lawsuits ensued, including criminal charges brought against Mr. Hadid in 2017, and later a civil suit claiming he had not followed terms of an earlier plea deal and had continued construction of the home illegally.

At issue throughout the claims against Mr. Hadid was the stability of the land on which the partially completed mansion sat; neighbors and the Bel Air Association, a homeowners’ group, alleged the construction was too big for the unstable hillside and presented a danger to the properties below and adjacent to it. In 2019, the Los Angeles Superior Court judge ordered that Mr. Hadid demolish the construction, upon which Mr. Hadid claimed he did not have the funds needed for the demolition. He subsequently filed for bankruptcy.

A complicated receivership with a creative solution

On December 2, 2019, the court issued an order appointing Douglas Wilson as receiver to demolish the onsite structure for the entity holding the title to the subject property, beginning a highly complex and dynamic assignment involving neighbors, the City of Los Angeles, the Tax Assessor’s Office, the Court, and many departments within the city.

The assignment had two main objectives: First, to obtain the funds needed for the demolition; and second, to oversee that demolition process.

Because Mr. Hadid had filed for bankruptcy, the receivership first involved creating the strategy for funding the costly demolition. It quickly became clear that a straightforward sale of the property to net the demolition funds carried too many risks for prospective buyers, indicating the receiver would need another solution.

Through an order of the court, the receiver was granted the ability to use receivership certificates — a key tool which allows the receiver to obtain financing secured by the receivership estate, with priority over existing lienholders.

The receiver next pursued traditional financing through the use of receiver certificates, but again reached a hurdle, finding the loan-to-value on the property was too low. Utilizing the receiver’s background in real estate finance and development, the receiver decided to once again shift the approach and pursue a receivership sale of the property in order to fund the demolition.

The property was sold through receivership sale at auction in December 2021 to a contractor that was equipped to complete the demolition.

Though the sale of the real property was complete at that point, the receivership then continued to include its next major objective: completing the demolition, which the buyer and general contractor agreed to complete within nine months of the sale.

The demolition itself required an objective assessment as to a process that would be safe and secure. Again, the receiver leaned on experience in real estate development in order to create a strategy that was acceptable to the court. With the support of numerous consultants, including structural, geotechnical and civil experts, the receiver developed a plan for demolition — the majority of which has been safely and soundly completed.

While receiverships are often complicated, the Hadid receivership, with its multiple steps, stakeholders and priorities, underscores the importance of this remedy and the creative solutions a receiver can provide.

**Douglas Wilson is the Chairman and CEO of Douglas Wilson Companies, a specialized provider of
real estate and receivership services,
headquartered in San Diego.