Fashion Wars: Jordache to Foreclose on Versace Palace

Times are tough, even amongst the nation’s fashion industry. That is why Jordache Enterprises, a clothing company that used to be pretty famous for its brand of designer jeans and is still relatively well-known in the fashion community, is trying to initiate foreclosure proceedings against the owners of the former Versace mansion.

The property, a pretty nice 23,462 square-foot home located in the upscale, ritzy glam factory that is South Beach, Florida, is notorious for being the location where fashion icon Gianni Versace was murdered in 1997. Since then, it has been turned into a hotel called Casa Causarina and owned by an investment group, including managing member Peter T. Loftin.

One reading this might wonder, “How in the world did Jordache get involved in this? And how does it involve jeans?”

Well, jeans for once are not involved in this case, but Jordache is because the company, through its subsidiary VM South Beach, is a real estate investor and purchased a $25 million mortgage on the property from German bank WestLB late in 2011.

Since then, Jordache alleges, the owners of the boutique hotel have not made mortgage payments. And since Florida is a judicial foreclosure state, Jordache had to take the case to the courts and petition the court to grant its right to initiate the foreclosure process.

There is definitely some shady business going on, primarily because the investment group behind Casa Casuarina – the converted-Versace-mansion-turned-hotel – includes one Scott Rothstein, who is facing a lot of legal trouble over a Ponzi scheme that is rumoured to have bilked approximately $1.2 billion from investors.

The process from here could drag out, depending on the particular foreclosure backlog that exists in the courts in that part of the state. Further complicating issues is the fact that the defendants in this case are the plaintiffs in another case – a lawsuit against WestLB claiming that the bank did not properly handle the documentation behind the property purchase.

Miami-Dade County certainly is not a place to expect swift legal action, especially considering the massive number of residential foreclosures, commercial foreclosures, and distressed properties in the pipeline. If Jordache wants to reap some satisfaction from the lawsuit, it had better be willing to wait.

In the meantime, maybe it can resurrect its designer jean empire and make Jordache jeans a fashion icon once more.