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Legal Battle Over Cote d'Azur Property

Tuesday 17 March 2009

A Russian billionaire is seeking reimbursement of a deposit of €39 million he paid on the most expensive property in the world.

Regular readers will recollect that last summer we carried an article on the purchase by Russian billionaire Mikhaïl Prokhorov of the luxurious Villa Lepolda, located in the Mediterranean resort of Villefranche-sur-Mer.

At the time, Prokhorov was issuing denials that he was the purchaser of the property, for a reputed figure of €500 million, a world record sum for a property.

Well, it turns out that he was the purchaser after all, although for a more modest €390 million, still the highest price for a property anywhere in the world.

Only now, however, it seems his ardour for a property on the Cote d’Azur has waned somewhat, as he is taking legal action to withdraw from the sale.

His difficulty is that he does not want to do so without also recovering the €39 million deposit he paid when he signed the sale and purchase contract!

It seems his lawyers have found an administrative error in the process, which they are now using to argue in the French courts that he should be released from the contract.

Rumours circulating are that the issue relates to the right of prior acquisition by the French national land agency SAFER, who were seemingly notified of a lower price on the property than was stated in the sale contract.

SAFER have stated they have no interest in the property, or that the valuation they received was substantially different to that in the contract. They would only normally intervene in a sale purchase to grant right of first purchase to a farmer, but it is hardly like that this would apply in this case!

Lawyers acting on behalf of the owner, the heiress Lily Safra, have stated there is no case to answer, and that the Russian billionaire is using an ‘absurd pretext’ in order to be released from the contract.

There is equal speculation that he may not actually want to get out of the contract, but is using the legal proceedings as a means of getting a price reduction. These reports have been strongly denied by legal advisors of the buyer.

At the time the property was sold, it seems the owner was rather reluctant to sell it, and only agreed to do so after protracted negotiations with Prokhorov.

Whilst a sale price of around €400 million would certainly seem a good reason to sell, it is being reported that the owner is proposing to give all the proceeds to a medical charity.

In the meantime, she and her domestic staff have quit the property, and all the furniture that was once in the property have been cleared, so it now stands empty waiting for the outcome of the court case.

To be continued….

 

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