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Originally published Tuesday, November 9, 2010 at 1:04 PM

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Mastro mansion has an all-cash buyer

Bankrupt real-estate magnate Michael R. Mastro's Medina waterfront mansion has a buyer — for $9.1 million, in cash.

Seattle Times business reporter

Bankrupt real-estate magnate Michael R. Mastro's Medina waterfront mansion has a buyer — for $9.1 million, in cash.

That's $800,000 less than bankruptcy trustee James Rigby asked when he listed the 7,000-square-foot house for sale a month ago — and a whopping $5.9 million less than Mastro paid for the property in 2006.

Rigby revealed the tentative deal in papers filed in U.S. Bankruptcy Court in Seattle on Tuesday. Bankruptcy Judge Marc Barreca must approve the sale.

A hearing is scheduled Dec. 3.

The buyer is unidentified. Bainbridge Island lawyer R. Bruce Johnston signed the purchase and sale agreement, but he said Tuesday that he did so on behalf of a client whom he would not name.

Mastro, 85, a longtime, prolific real-estate developer and lender, was pushed in July 2009 into what probably is Washington's largest bankruptcy ever. He has filed documents listing more than $570 million in debts.

Rigby was appointed by the court to identify and sell Mastro's assets and distribute the proceeds to his creditors.

He has indicated creditors whose investments were not secured by real estate or other collateral are unlikely to get more than a small fraction of their money back, and has identified the Medina mansion as the asset most likely to generate any significant money for them.

Rigby obtained control of the house earlier this fall after a long legal struggle. Mastro moved out in late September.

Just who would get the proceeds from the pending sale remains to be decided, however.

Several Mastro business associates, backed by Mastro, contend they should get the money because they accepted the house as collateral for $12 million they loaned Mastro in early 2009.

Rigby contends that loan is a sham. The dispute will likely go to trial next year.

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In court papers, Rigby said 125 agents previewed the house after it was listed for $9.9 million in early October. He said he received three all-cash offers, ranging from $7 million to $8.25 million, but was able to negotiate the price up to $9.1 million.

Mastro paid $15 million for the Evergreen Point Road mansion four years ago. It has 176 feet of Lake Washington waterfront, a pool, a sauna, a wine cellar and a two-bedroom apartment above the garage.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

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