ASPEN, COLO. -- The moving van's driver and crew sat idly by their truck while a lawyer and deputy sheriff engaged in a standoff with the caretaker of the glittering Aspen mansion they had come to clean out.
The house belonged, for the moment, to flamboyant Washington developer Mohamed Hadid, part-owner of the Ritz Carlton Hotel on Massachusetts Avenue NW in the District and the man who helped build hundreds of millions of dollars of commercial real estate in Washington during the 1980s.
The lawyer, Joe Krabacher, had been hired by Signet Bank-Maryland to collect a $6 million debt resulting from a failed Hadid development in Rockville. He and the deputy sheriff planned to seize everything Hadid owned on the Aspen property, including art, rooms full of designer furniture and a 1965 Bentley in the garage.
But the 41-year-old Hadid was one step ahead of them that July morning. He produced a copy of an agreement he claimed showed the furnishings couldn't legally be seized because they belonged to a Waukeegan, Ill., bank -- the same bank that held the mortgage to the house and happened to be foreclosing on Hadid for failing to make payments. Krabacher, the deputy and the movers left the house puzzled and empty-handed, unsure who owned the property they had come to collect.
Less than two weeks later, Hadid arranged to have one of his business partners buy the defaulted $2.8 million loan on his Aspen house from the Illinois bank. That transaction, if it works, will ensure that Hadid's frustrated creditors don't recover a dime from the Aspen property.
It also means that Hadid, who spends considerable time in both Virginia and Colorado, will continue to be a force in Aspen, where he heads an investor group that is building a new $110 million, 292-room Ritz-Carlton Hotel.
The recent events in Colorado illustrate how adept Mohamed Hadid can be at keeping his development enterprises afloat in the face of pressure from creditors.
The events also demonstrate how some aggressive developers have run into personal financial difficulties, even as they continue to pursue flashy new real estate ventures.
Hadid and his spokesmen in Washington and Aspen dismiss the Colorado situation as a personal matter that has nothing to do with the financial strength of Hadid's real estate businesses, including Rosslyn-based Hadid Development Co., which employs about 47 people.
After comparing himself with struggling New York real estate developer Donald Trump and referring to his need to cut back on "my homes, my cars, my airplanes," Hadid said in an interview last week that he has put himself on a personal "cash diet."
"When the market is tough, the first thing you do is shrink your own personal liabilities," Hadid said. "My personal situation is much different than my corporate situation. My personal situation is something I need to reorganize. ... I have not filed for bankruptcy personally. I have done my own internal restructuring. ... By the time I finish my restructuring, I hope to have almost no debt and no liabilities."
Hadid said last year he had a net worth of $90 million. He said last week that he won't know what his net worth is until he finishes the reorganization of his personal finances.
Bothered by the attempted property seizure at his home in Aspen, Hadid said he has since completed details of a settlement with Signet.
Although he has ongoing legal battles with banks and has cut back on some personal expenditures, Hadid insists that his real estate businesses remain strong. He said that he has ongoing projects around the world and has shifted the emphasis from investing his own funds to working on a "fee-only" basis, in which he earns fees or receives a stake in real estate properties in return for putting deals together.
"I am financially extremely strong," he said, when asked about his business interests. "Everything is funded. Everything is taken care of ... We have very strong partners."
Hadid declined to identify his partners, but said he and his partners own a sizable amount of valuable Washington real estate, including office buildings at 815 Connecticut Ave. NW and 1620 L St. NW.
He said he is a leader of investor groups who own Ritz-Carlton hotels in New York and Houston as well as the right to build a Ritz-Carlton in Scottsdale, Ariz. He also said he owns 75 percent of the undeveloped land in Aspen, and he has been the center of attention and controversy there after winning a battle with Trump over who would build Aspen's Ritz-Carlton hotel and then offending some area residents with his grand architectural plans.
Hadid, who emigrated from the Middle East as an infant, spent his teen years in Northern Virginia, where he attended Washington and Lee High School in Arlington. He moved into business at a young age and one of his first ventures was a classic car business in Georgetown.
After a stint in the import-export business that broadened his contacts, Hadid went into the real estate business about 10 years ago. His business has come full circle -- he started by matching available properties with investors and taking pieces of the deals for himself.
Hadid has been no stranger to litigation as he built his development fortune, and he has negotiated his way through a maze of lawsuits as he dropped and added partners and brokers along the way.
One of Hadid's strengths has been his ability to come up with the huge sums of money that are needed to do big real estate deals.
"For me, it's the easy thing in the world to find money," Hadid told a reporter in 1988. "I don't seek money; I'm sought."
Arab investors like Saudi Abdkul Azziz al-Ibrahim, a brother-in-law of King Fahd, are among Hadid's sources of funds.
But it is creditors, not investors, whose pursuit of Hadid has garnered him unwanted publicity in Colorado this summer.
Signet Bank is not the only creditor that has pursued Hadid from Washington to Aspen. Others have included Donohoe Companies, a Washington construction firm that claimed Hadid owed more than $804,000. Hadid recently has settled with Donohoe, his spokesmen said, though no details of the settlement of were available.
The troubles in Aspen started when Signet obtained a judgment against Hadid in August 1989 for $35.7 million. By Hadid's account, the judgment was obtained as part of a deal with the bank to take back his failing Executive Office Centre development in Rockville. Hadid had personally guaranteed the loan from Signet.
After the bank sold the Rockville property, $6 million remained to be collected. Eventually, the bank tracked Hadid to the exclusive Aspen neighborhood he shares with Barbra Streisand and Rupert Murdoch.
Signet hired attorney Krabacher who tirelessly hounded the developer in Colorado courts. He obtained writs of garnishment for at least 15 banks, businesses, municipalities and associates who might have owed Hadid money or possessed his property. With the documents, Signet had the right to seize assets that would otherwise be paid to Hadid.
At least one person who was on Signet's list, actor George Hamilton, paid his debt to Hadid just days before court actions were taken to intercept the money on Signet's behalf, sources said. Signet's list also included former Saudi ambassador to the United States Faisal Al-Hegelan. He lent Hadid $5 million on the Aspen house. Hadid said his debt to Al-Hegelan has been cleared up.
As Krabacher launched his pursuit in early July, Home Federal Savings Bank of Waukeegan, Ill., was preparing to lay claim to Hadid's Aspen home because he had failed to make payments on a $2.8 million loan.
But the bank announced on July 24 that it had sold the mortgage on Hadid's Aspen home to Aspen Enterprises International, a company that is one of Hadid's partners in the Ritz-Carlton hotel project under construction in Aspen. Hadid declined to say what individuals are affiliated with with Aspen, but confirmed they were his business partners.
It appeared to be a clever move, according to sources familiar with foreclosure laws. If the deal works, creditors pursuing Hadid would no longer have a claim on the house or any proceeds from its sale. Meanwhile, Hadid's partner, Aspen Enterprises, could end up with ownership of the property free and clear. The house is worth at least $5 million, according to Hadid.
While Hadid has, so far, scrambled to keep creditors from knocking down the door on his Aspen house, he continues to hammer out deals.
In Aspen, he convinced the resort town's unpredictable, anti-growth City Council to give him development rights to a protected 66-acre holding on the west end of the city. In exchange for a substantial donation of land to nonprofit foundations like the Aspen Institute, which has its campus on the property, Hadid came away with approval to build homes and town houses nearby that could earn him $12 million to $18 million.
Meanwhile, construction at his Ritz-Carlton development two blocks from the ski lifts in Aspen continues to progress after three years of fighting with local officials over the size and design of the hotel.
Despite his personal financial woes, Hadid still appears to have the solid backing of investors like Al-Ibrahim, the primary funding source for the Aspen Ritz-Carlton Hotel.
"That will be open this time next year," Hadid predicted.
Staff writers Sharon Walsh, David S. Hilzenrath and David A. Vise contributed to this report.