Funny Business with Jane Wells

Russian Billionaire Loses $54 Million Deposit

Call it the worst escrow ever.

Mikhail Prokhorov
Konstantin Zavrazhin | Getty Images

Mikhail Prokhorov, Russia's $9 billion nickel magnate, is out nearly $56 million. His deal to buy a massive villa on the French Riviera fell through.

This is a story I've been followingsince Prokhorov first offered $540 million for the Villa Leopolda in the summer of 2008.

By February 2009, he was reportedly having money problems and wanted his deposit back.

By the way, back then, the dollar was a mess, and his deposit was worth a lot more (bet he wishes he was paying in dollars).

However, news reports at the time claimed Prokhorov wanted out of the housing deal not for money reasons, but because he "would not do business in France until the authorities apologize for arresting him in a prostitution probe two years ago."

He reportedly got his apology. He still didn't buy the house.

This week Prokhorov got a French lesson in real estate law.

A judge ruled the billionaire must forfeit his $54 million depositto the villa's current owner, Lily Safra, and he also owes her $1.5 million in interest. Apparently, under French law, once you sign a contract you only have a seven-day "cooling off period" in which to walk away with the deposit.

Meantime, Prokhorov has offered to buy a controlling interest in the New Jersey Nets. I'm not sure what sort of cooling off period is allowed, or if he put up a deposit, but the Nets' current owners may want to look into this.

It's not clear if Mrs. Safra plans to put the villa back on the market. The 71-year-old widow of billionaire banker Edmund Safra inherited the house "after he was murdered by his male nurse in Monaco in 1999." She plans to give the massive deposit and interest she receives from Prokhorov to charities and universities. "By transforming the deposit into an act of giving I would like to encourage all who can do so to support medical research and other humanitarian causes." Some of the money will reportedly go to neuroscience research, which is a very good idea.

Someone who offers more than a half billion dollars to buy a house really needs to have his head examined.

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