Even loans to the ultra-wealthy can go bad.
A Texas man, once swimming in oil wealth but now reportedly fallen on hard times, has suffered the ultimate indignity—having his yacht seized by a lender.
William Kallop was until recently the proud owner of the Natita, a 217-foot beauty featuring a movie theater and helipad and named after his mother-in-law. But the Wall Street Journal reports that the Natita is now the property of Goldman Sachs.
Kallop used the yacht as partial collateral for a $32 million loan from Goldman in 2014. Soon after, Kallop—a big spender whose recent acquisitions have included at least seven yachts, eight residences, and three jets—ran short on cash, leading him to lay off employees and try to sell assets.
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But the Natita, initially listed for sale at around $67 million, didn’t attract a buyer. Goldman claims Kallop stopped repaying the $32 million loan in November 2016. So Goldman filed suit and was awarded the boat by a Miami federal court.
The incident highlights what the Journal says is a steady rise in so-called “wealth loans”—large loans to wealthy individuals that are sometimes secured by assets like art, boats, and wine collections. Such loans are picking up as demand for traditional loans declines. Some observers say the drop in traditional lending is a warning sign for the broader economy.
Goldman is likely to auction the boat, which, even after several markdowns, is currently listed for more than the outstanding balance of its loan to Kallop.