Socialite Libbie Mugrabi has lost her Hamptons mansion following a court-ordered auction held Friday morning at Southampton Town Hall. The Bridgehampton estate, part of the settlement from her 2020 divorce from billionaire art collector David Mugrabi, sold for $5.864 million. Mugrabi did not attend the auction.
The sale concluded a two-year legal dispute stemming from Mugrabi's failure to make payments on a $3.5 million mortgage for the 7-acre property. She admitted to not paying any amount towards this loan. The total debt, including repayment, penalties, and legal fees, exceeded $9 million.
During the auction, approximately 10 bidders were present. Mugrabi's sister, Mia Rowe, initially made the highest bid of $7.8 million but did not produce the required deposit check, leading to objections from other bidders. Court documents indicated that the attorneys for both sides had agreed to the auction route if the property was not sold through a real estate listing by a specific deadline, which Mugrabi missed.
Mugrabi had previously attempted to sell the home through a public listing, with an initial asking price of $25 million, later reduced to $19 million. Her attorney had informed the court that the property's value was estimated between $10 million and $12 million. The lender, a shell company affiliated with REO Assets of America, had previously purchased the estate for $500 in an online auction after Mugrabi's initial default, a move that was met with protests.
In the hours before the auction, Mugrabi's attorney filed an appeal seeking to prevent the sale, citing a new lender for an $8 million mortgage to purchase the property herself. A judge denied this appeal minutes before the auction began. Mugrabi had also offered a Jean-Michel Basquiat artwork, valued at $40 million, as collateral for a separate loan, and had recently regained rights to the painting after a legal dispute.
One prior offer of $7 million from an individual with an allegedly questionable background was also considered and ultimately rejected by Mugrabi and her attorney.
Mugrabi faces further legal entanglements, with at least six unresolved cases. One lawsuit claims she is withholding nearly 100 drawings. Her attorney in that matter has petitioned to withdraw from the case, citing an irreparable breakdown in communication.
While the prospect of bankruptcy proceedings has been discussed by attorneys for both sides, no bankruptcy filing had been made as of Friday morning, according to court records.