Hedge fund manager Alphonse “Buddy” Fletcher has been forced to sell his Cornwall, Connecticut mansion for just pennies on the dollar, according to Bloomberg.
The estate, called Cornwall Castle, has seen its prestigious owners arrive in vehicles like pink Cadillacs and helicopters over the years. Among the list of previous owners, Saul Steinberg, the lead chairman of Reliance Group Holdings and Macy’s executive Joseph Cicio.
Fletcher bought the castle in 2001, before his American dream-style narrative of wealth and success ended in bankruptcy. For years, Fletcher and his wife, Ellen Pao, were well-known figures on Wall Street and in Silicon Valley.
And like any good criminal, Fletcher has been falling back on the race card for a living. He gained notoriety in 2011 when he sued The Dakota, one of Manhattan’s most exclusive co-ops, for racial discrimination. This was after he had also sued his previous employer, Kidder Peabody, for racial discrimination, in 1991. He won a $1.26 million award in NYSE arbitration as a result. In 2012, his wife filed a gender discrimination lawsuit against her employer, Kleiner Perkins.
But in 2012, the real problems under the surface for Fletcher started to rear their heads.
Fletcher’s funds were forced into liquidation or bankruptcy amid fraud allegations and an investigation by the SEC. Fletcher was accused of inflating his returns and using his clients’ money as a piggy bank. He was ordered to return $212 million in a default judgment in 2015 and divorced with his wife two years later.
The bankruptcy trustee trying to recoup the funds said: “We never located any meaningful assets.”
This brings us back to Cornwall Castle. In 2001, Fletcher took out a $4.4 million mortgage to pay $5.9 million for the 330 acre property – a record high price for a home in the area. Neighbors recalled his helicopter hovering overhead and annual parties thrown on Halloween. Fletcher, meanwhile, kept tacking on debt to buy more land, and eventually bought more than 1000 acres.
In 2013, he put the castle on the market for $8.9 million and there were no takers. In 2014, he started to fall behind on the payments and JP Morgan began foreclosure proceedings the next year. And so the grand building and land have now been sold off in pieces to pay his debts.
In March, a local conservation group agreed to buy 107 acres for $622,000. In June, JP Morgan sold the 16,800 square-foot castle and 275 acres for $1.6 million. The remaining portions of his land will hit the market over the next few months.
Former owner Cicio said: “To me, it was out of a storybook. Sadly, in the very recent past, they let it dramatically deteriorate.”
Cicio is right – the house needs a significant amount of work. A barn on the property was ruined by a fire in 2013. Meanwhile, pipes burst, grass was overgrown and the roof developed leaks. The HVAC systems need to be replaced and there’s a mold problem that needs to be dealt with.
This condition belies the once prestigious nature of the castle. Built in 1925, it was supposed to be a fairytale retreat for New York society couple Charlotte Bronson Hunnewell, who had developed Manhattan’s Turtle Bay Gardens, and her second husband, Dr. Walton Martin.
David Bain, a real estate broker who handled the foreclosure sale said: “It needed everything. Not a pretty picture for most buyers.”
Jeffrey Jacobson, who wrote a book about the history of the castle said: “What kind of a sensible, logical person wants to buy a castle?”
Most wealthy buyers today would likely have no tolerance to make improvements to an old castle, according to Graham Klemm, a local real estate broker.
However, it appealed to one man: Russell Barton, a developer who recently transformed a former jail into a mixed use complex featuring residences and a restaurant. Barton was taken back by the gargoyles on the building and the original lead windows, stonework and seclusion. Being a developer, he also has the resources and the know-how to fix it. He has spent the past month renovating the castle with 20 workers on site, doing eight hour shifts each.
Barton said: “This is a small job for me. The jail took two years. This will take two months.”
He thinks the renovations will cost about $150,000, which is far less than the $3 million to $4 million estimated by some real estate professionals. His goal is to use the castle as a permanent home for himself and his wife and to use the castle’s servant quarters as his company’s headquarters. For now, the couple is living with their Jack Russell terrier in a one bedroom stone cottage by the pool.
Barton concluded: “I like this old lady. Everything about it is spectacular.”
Meanwhile, we’re sure Fletcher is busy preparing another racial discrimination suit, perhaps against the SEC or his home’s new owner, as we speak.
via ZeroHedge News https://ift.tt/2Zswupo Tyler Durden