Libbie Mugrabi is staying in the Hamptons mansion she lost in a court-ordered foreclosure auction last month, while her attorney seeks to invalidate the sale. From inside the Bridgehampton home, she said, “I don’t know what’s going to happen,” and she has not set a time to leave.
The property is a 10,687-square-foot house on 6.8 acres. Mugrabi received it in 2020 as part of her divorce settlement from David Mugrabi, and over the past two years she has tried to convince the court she should keep it despite defaulting on a $3.5 million loan tied to the home.
Sept. 11 filing in Suffolk County
Claude Castro filed the action in the Suffolk County appellate court to invalidate the auction. On Sept. 11, the lender’s law firm responded to Mugrabi’s motion to stop the sale and give her more time to pay off the loan, filing on behalf of REO Assets of America in Great Neck, N.Y.
In the spring, Mugrabi agreed to a settlement that gave her 90 days, until Aug. 25, to sell the home through a traditional listing or give up all rights to it. The effort started with a $25 million asking price and was reduced by two price cuts to $19 million.
Libbie Mugrabi and Claude Castro
Mugrabi and Claude Castro told the court they had lined up a lender willing to provide a loan that would save the home and allow her to stay. Mugrabi said she would use a Jean-Michel Basquiat painting appraised at $40 million as collateral, after winning the artwork back in a separate legal battle.
Her handwritten note to the court said she wants to handle the situation herself from this point henceforth. She has now parted ways with Castro, according to court documents, and the dispute over who controls the next step now sits with the Suffolk County appellate court.
Maria Beltrani on appeal rights
Maria Beltrani said that because Mugrabi did not sell the home and consented to the eviction in the settlement, “she gave up virtually all of her rights to appeal.” At the auction, Mugrabi’s sister Mia Rowe first won the property with a $7.8 million commitment after topping roughly 10 other bidders, but she did not return after saying she was going to a Chase bank branch to get the required 10% down payment.
Jane Scher said she wants this all over so her daughter can make a fresh start as the artist she truly is. For Mugrabi, the immediate question is whether the appellate court moves first on the request to invalidate the auction or whether the sale holds while she remains in the house.
