A Los Angeles County Superior Court judge appointed a new receiver Wednesday to assume control of a prominent Laguna Beach real estate investor’s companies, including the entity managing Hotel Laguna.
In the previously unreported lawsuit filed June 25, Delaware-based Coastline Loans LLC demanded payment from corporations managed by Mohammad Honarkar for a $175 million loan, accrued interest, and attorneys fees.
“Defendants have breached the terms of their respective obligations by various covenants breaches, including but not limited to pending court actions, material representations including but not limited to undisclosed debt, and non-payment of loan fee and interest,” Coastline Loans’ attorney Tom Normandin wrote in the complaint.
This is the third court-ordered receivership to take custody of Honarkar’s real estate holdings within the last year. Covina-based receiver Carl G. Petta is authorized to collect all profits from the properties, according to the July 14 order signed by Judge Mitchell Beckloff.
The portfolio includes several high-profile hospitality and event properties including, the Holiday Inn at 696 S. Coast Hwy., The Hive on Laguna Canyon Road, Seven7Seven, 7 Degrees, Royal Hawaiian restaurant, and the former site of Laguna Nursery. The loan also covers several other short-term rental properties in Laguna Beach, a Corona del Mar commercial building at 2711 E. Coast Hwy., a Redlands apartment community, and a pair of vacant lots near Los Angeles’ Koreatown.
Last July, the receivership proceedings started via a court order connected to Honarkar’s divorce proceedings with his ex-wife. The receiver in that case was ultimately discharged by a judge after he reported the properties were hampered by several lawsuits, a state tax audit and the specter of looming debts, including an estimated $150,000 in back taxes to Laguna Beach.
In January, Honarkar’s now-former creditor filed a foreclosure complaint on a $195.5-million loan backed by a portfolio of 19 properties, according to a lawsuit filed in Orange County Superior Court. This receivership dragged on until the underlying loan was acquired by a entity controlled by Laguna Beach developer Chris Dornin. In a surprising twist, an Orange County Superior Court judge approved an order on June 8 granting permission to Honarkar’s companies to refinance with a new creditor.
Court documents have since revealed Coastline Loans LLC as the new creditor. But by June 24, Coastline declared Honarkar owed them an unpaid current principal of more than $176 million, accruing interest at a daily rate of more than $48,000.
Honarkar downplayed the impacts of the latest receivership on Tuesday.
“The [Orange County] judge approved a refinancing agreement last month, and we have a new lender,” he said in a prepared statement. “The lender requested, and we agreed, that a new receiver would be put in place until the disposition of my divorce—expected in coming weeks.”
The complaint by Coastline Loans doesn’t mention the divorce proceedings.
In a phone interview with the Independent on Friday, Andrew Stupin, CEO of Huntington Beach-based Coastline Real Estate Investments, said his group decided to issue Honarkar the loan because he believes it was a good investment.
“I know the [Hotel Laguna] property. I’ve been a surfer and beachgoer in Orange County since the [1950s],” Stupin said. “The new group with Mo has a great vision for it. I think they have the firepower to make it happen.”
When asked if he was ever concerned about Honarkar’s legal battle with his former creditor, Stupin said he’s not involved in the details of the ongoing litigation
Ioannis Xilikakis verified the legal complaint as an authorized agent of Coastline Loans LLC. The Lake Forest resident is president of phone card wholesaler IX Telecom, Inc. Xilikakis didn’t respond to a phone call seeking comment on Monday.
Laguna Beach partially lifted a stop-work order at Hotel Laguna on Thursday, allowing a remodel of the restaurant, bar, and hotel lobby to resume, according to a city press release.
“This receivership has no bearings on the City’s partial lifting of the stop-work order,” City Manager Shohreh Dupuis said in a statement late Tuesday.
It’s unclear how the appointment of a receiver will impact plans to reopen the hotel’s first floor to the public. The presiding judge ordered Honarkar’s companies to turn over to Petta all banking records, proof of insurance contracts, keys to properties, current rent rolls, and other documents.
Petta didn’t respond to phone calls to his office seeking comment.
“The first phase of the Laguna Hotel revitalization will be completed in a couple of weeks, and we look forward to inviting our friends and neighbors in to experience it and enjoy it,” Honarkar said in a prepared statement.
A hearing is scheduled for Sept. 23 in Los Angeles County Superior Court.
Danny, who are you to continue to write such harmful articles about the Honarkar’s. You never write anything about all the good in town they are doing, only to focus on his divorce and personal dealings. Shame on you for this lame excuse of “reporting.”
While it is sad to read about the financial travails of anyone, many of us appreciate this kind of investigative reporting in our community paper rather than puff pieces. The Laguna community can’t help but be interested in the financial viability of a developer who owns so many of Laguna’s key properties and leases, including the Holiday Inn, The Hive, 7 Degrees, Hotel Laguna, and Terra at the Festival of the Arts. As regards the latter two, it appears that the City and current and past City Managers have been extremely accommodating about permitting Mr. Honarkar extra time and extended fee schedules–more so than any other developer in town. One can bet that other business owners/developers, as well as residents making changes to their homes, wish the City was as benevolent about their renovations.
I find it repulsive that Mr. Honarker gets beat up by this publication week after week. Inconceivable that this gets more press than the repeat millionaire rapist from last week. I propose we stop prying into this man’s personal dealings and let him get things done at the Hotel Laguna. We should all be thankful he hasn’t walked away from our crazy polarized community.
I suggest the Independent cover some real news stories. Many want to know what happened to the FPPC violations of council member Weiss during the “hot mic” incidence. Who was the leak from the last city council meeting closed session? Why does Mrs. Weiss continue to demand transparency while commenting and submitting letters to the editor under Deborah Laughton, even after it has been brought up by a number of individuals ? What’s going to happen to the dog park?
HEY LAGUNA-LIBS! You’ll prolly loose your hard-ons soon, as all this pearl clutching reporting is over nothing but refinancing . . Like you all do year after year after year to keep the houses your grannies left you, that you couldn’t afford if you didn’t have the Pacific Ocean to back your collateral appreciation. It’s clear that you’ll never grow up you babies!
Given Councilman Weiss’s indiscretion on the hot mike insinuating that he would vote against the applicant Mike Grey’s residential project for the sin of being too rich, and now his wife Deborah’s impugning of Mo Honarkar because he “owns so many of Laguna’s key properties,” it seems their adversaries are being persecuted for the crime of accumulating too much wealth. Thank goodness we have populists fighting for ordinary Lagunans.
For those reading-challenged, allow a repeat: “The City and current and past City Managers have been extremely accommodating about permitting Mr. Honarkar extra time and extended fee schedules–more so than any other developer in town. One can bet that other business owners/developers, as well as residents making changes to their homes, wish the City was as benevolent about their renovations.” Shouldn’t the rules be the same for all business owners, developers and residents? Isn’t fair and equal treatment a core American value?
Daniel Langhorne – thanks for keeping LB residents and interested readers informed with the facts on the status of Mr. Honarker’s financial and legal issues and the hotel construction work progress. This type of objective investigative reporting is exactly what LB stakeholders deserve and expect. Thank you.
Oh please, Deborah. He’s restoring Laguna’s iconic landmark building that’s currently a dilapidated blight on our town. We all want to see it opened yesterday. The city needs the TOT revenue. Mo should get even more preferential treatment. Methinks you doth protest too much.
Methinks BF doth lacketh brains too much: “get even more preferential treatment,” modifying a modifier? And he calls himself an author?
Got thesaurus/dictionary/grammar check much?
Preferential: Granted or favored privilege. Superior, Better, Special, Advantageous.
What’s next? Super Duper preferential treatment?
Planet Earth to BF: Maybe you should’ve waited until 4:20 pm to post?
I’m a retired general contractor, built both residential and commercial projects here and in the SOC for decades: Nobody ever let me continue work and only red tagged a portion of a complex project.
But then, when you’re Mo Money, got friends like BF, rules? What rules? He don’t need no stinking rules—He’s King Mo, “rules” Laguna by way of buying half of it via bottom-feeding the real estate market and if the media columns are any indication, using a sketchy-sketch revenue model.
Caveat Emptor: Whether it’s Mo or BF, aka the tail that wants to wag the Laguna dog.
For the record, you OWN something when it is paid for, If there is a creditor, they in fact own the property until any and all contractural obligations are paid in full. We see ownership claims quite often these days by high profile individuals when in fact the assets claimed owned are highly leveraged.