Mohamed Hadid's company, 901 Strada LLC, filed for reorganization in federal bankruptcy court on Wednesday, the day before Thanksgiving

By Karen Mizoguchi
November 28, 2019 07:05 PM
Dimitrios Kambouris/Getty

Mohamed Hadid, who is the father of supermodel sisters Gigi and Bella Hadid, has filed for bankruptcy on behalf of his company after being accused of illegally building a mega-mansion that was larger than city rules allowed.

Hadid’s company, 901 Strada LLC, filed for reorganization in federal bankruptcy court on Wednesday, the day before Thanksgiving. The Hadid patriarch, 71, declared the company is $10-50 million in debt due to the construction of his 30,000 square-foot Bel-Air mansion, which he reportedly began in 2011, according to court documents obtained by Daily Mail and TMZ.

Hadid’s attorney, Bruce Rudman, declined to comment to PEOPLE but did refute Daily Mail’s reporting that he declared Hadid was “broke” in Los Angeles Superior Court.

In the bankruptcy filing, Hadid, who made cameos on Bravo’s Real Housewives of Beverly Hills and Vanderpump Rules, reportedly said the company is over $386,000 in debt to a design and management company. In addition, he claimed his company is over $200,000 in debt to a building materials company and owes over $93,000 to a demolition company as well as over $35,000 to plumbers.

The developer, who was married to RHOBH alum Yolanda Hadid, also reportedly said his mansion requires immediate attention with the need to be physically secured or protected from the weather, according to TMZ, which also reported that local taxpayers would have to pay the mansion’s expenses if Hadid fails to pay the estimated $5 million to demolish it.

RELATED: Mohamed Hadid, Dad to Gigi and Bella, Reveals His Opulent Mansion, Which Once Hosted a Homeless Michael Jackson

The filing for Chapter 11 protection comes after Hadid’s neighbors filed a lawsuit last year and called the construction of his Bel-Air mansion “the most illegal structure ever constructed” in Los Angeles and a “seven-year saga,” according to the New York Daily News, which also obtained the latest court documents. The lawsuit is set to go to trial in March 2020.

“If this house came down the hill, it would take a portion of the neighborhood with it,” Judge Craig Karlan said at a hearing last week, TMZ reported.

Hadid reportedly refuted the allegations his home is “unsafe,” telling TMZ on Nov. 22, “[The house] has not moved a millimeter! It has never been an imminent danger to the neighbors.”

The father of five also filed separate court documents recently, asking the judge to temporarily halt the lawsuit with his neighbors pending the outcome of his bankruptcy filing, according to the New York Daily News, which also obtained an amended complaint from the neighbors stating: “[The neighbors] are in constant fear of the hillside collapsing. Their home values are crippled, and their privacy and serenity are invaded by the illegal and unsightly structure looming above them.”

In 2015, the city filed misdemeanor charges against Hadid for failing to obtain proper construction permits or abide by orders from the safety department, according to the Los Angeles Times. Hadid pled no contest to the charges but in 2017, he was ordered to complete community service and pay fines.

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