The glittering saga of Gary Winnick, once celebrated as the richest man in Los Angeles, has ended in a stark revelation of financial ruin. The former billionaire, who amassed a paper fortune of $6.2 billion through his telecom venture Global Crossing, died in 2023 leaving behind a mountain of debt. His widow, Karen Winnick, is now embroiled in a desperate legal battle to retain control of their iconic homes and art collection, all pledged as collateral for a massive loan.
The Meteoric Rise and Lavish Empire
Gary Winnick's journey began on Wall Street under the tutelage of Michael Milken, the famed junk-bond king, in the 1970s and 80s. He cut his teeth on leveraged buyouts before founding Global Crossing in 1997. The company's ambitious plan to lay a global undersea fiber-optic network tapped into dot-com era frenzy, making Winnick a billionaire in under two years—a rise faster than Rockefeller or Gates.
He swiftly translated his paper wealth into an opulent lifestyle. In 2000, he and Karen purchased the legendary Casa Encantada estate in Bel-Air for $94 million, then the most expensive home sale in U.S. history. They poured tens of millions into a lavish renovation, employing artisans from Las Vegas and Paris. The couple also owned a Malibu beach house, a New York pied-à-terre, and filled their homes with masterpieces by artists like Cy Twombly and Edward Hopper.
The Cracks Beneath the Surface
Global Crossing's collapse in 2002, a hallmark of the dot-com bust, vaporized billions in market value. Winnick, however, had cashed out roughly $730 million in stock between 1999 and 2001. He later paid $55 million to settle shareholder lawsuits. Outwardly, the luxury continued. He was a famed philanthropist, donating over $100 million, and a confidant of President Bill Clinton.
Yet, behind the scenes, Winnick became a serial investor in tech and media startups, often finding himself in costly litigation. By 2020, needing cash, he turned to his old friend Richard Ressler, co-founder of CIM Group. CIM issued him a $100 million loan, secured against his prized real estate, art, and even his wife's jewelry.
A Dire Legacy and a Last-Minute Reprieve
Gary Winnick's sudden death in November 2023 at age 76 exposed the dire state of his finances. Karen Winnick claims she was unaware of the severe debt until after his passing. The CIM loan had ballooned to about $155 million, and they defaulted on payments. In September 2024, CIM moved to foreclose on Casa Encantada and the Malibu home.
In court filings, Karen alleges CIM orchestrated a "loan-to-own scheme," a claim the firm calls "fantastical." With legal fees mounting and his estate declared insolvent, the fate of Winnick's empire hung in the balance. A foreclosure auction was scheduled for December 2024 at the Pomona Civic Center Plaza.
In a dramatic twist, Karen's lawyer secured an emergency stay just hours before the auction, halting the sale pending an appeal. The iconic properties, symbols of a vanished fortune, were granted a temporary reprieve, but the future remains uncertain for the widow of the man who once epitomized Los Angeles wealth.
This story underscores a modern paradox of wealth: vast net worth often exists on paper, leveraged to sustain luxury, but can evaporate when markets turn or debts cascade. Gary Winnick's life serves as a stark reminder that even the most dazzling fortunes can be built on fragile foundations.
