The Belwood Investments lawsuit that drew the most attention, a Ponzi-scheme claim brought by a former marketing lead, has been resolved on undisclosed terms, but the California real estate crowdfunding firm now faces a far larger problem: a federal bankruptcy judge ruled in June 2026 that Belwood filed for Chapter 11 in bad faith, converted the case to Chapter 7 liquidation, and cleared the way for foreclosure on the gutted Malibu mansion the company bought from Kanye West.1The Real Deal. Kanye West’s Former Malibu Home Heads to Foreclosure Again Hundreds of small investors who bought fractional stakes through Belwood’s app are now unsecured players in a liquidation.
The Ponzi Scheme Lawsuit
A former Belwood marketing lead, David Contreras, sued the company and alleged it was “nothing more than a Ponzi scheme.”2Elle Decor. Kanye West Malibu Mansion Details The suit has been described as “now resolved,” but the terms of the resolution have not been made public.3The Real Deal. Belwood Investments Files for Bankruptcy The Wall Street Journal separately reported what it called a “patchy history” for both Belwood founder Steven “Bo” Belmont and the firm’s Malibu project.
No criminal fraud charges tied to the Ponzi allegation have been reported in the available record. The accusation sits as a civil claim that settled on unknown terms, not as a judicial finding.
Bankruptcy Filing and the Bad-Faith Ruling
Belwood Investments filed for Chapter 11 reorganization on March 18, 2026, in the U.S. Bankruptcy Court for the Central District of California in Santa Ana. The filing came one day before a foreclosure auction was set to proceed on the Malibu property on March 19.4PACER Monitor. Belwood Investments LLC Bankruptcy Case3The Real Deal. Belwood Investments Files for Bankruptcy The petition listed assets of between $100 million and $500 million, liabilities between $50 million and $100 million, and between 100 and 199 creditors.
Belmont emailed investors on March 19 to tell them the filing was “not a Chapter 7 [liquidation]” and promised a reorganization in which “everybody be made whole and become winners.” Some investors said they had not previously been told the property was in default or heading to auction.3The Real Deal. Belwood Investments Files for Bankruptcy
A group of secured lenders, including Anchor Mortgage Trust 2024-RTL1, Residential Investment Trust IV, Residential Investment Trust V, U.S. Bank Trust National Association, and Wilmington Savings Fund Society, moved to dismiss the case.5INFORuptcy. Belwood Investments LLC Bankruptcy Filing On June 12, 2026, the court granted in part a motion for relief from the automatic stay on the Malibu property. Four days later, on June 16, Judge Mark D. Houle ruled that Belwood had acted “in bad faith” in filing the Chapter 11 and granted the lenders’ motion. Rather than dismissing outright, the court converted the case to Chapter 7 liquidation.1The Real Deal. Kanye West’s Former Malibu Home Heads to Foreclosure Again
Belwood’s attorney, Michael Jay Berger, filed a motion to withdraw from the case on June 11, with a hearing scheduled for July 7, 2026.5INFORuptcy. Belwood Investments LLC Bankruptcy Filing
Foreclosure on the Malibu Property
Belmont bought 24844 Malibu Road from Kanye West for $21 million in September 2024.6Traded.co. 24844 Malibu Road Sale Details The Tadao Ando-designed home had been stripped of windows, plumbing, electricity, HVAC, and most interior finishes under West’s ownership and had sat exposed to the elements for nearly three years.7Robb Report. Kanye West Former House Malibu An $18.5 million acquisition loan from CV3 Financial Services funded the purchase; in exchange, CV3 took a 50 percent equity stake.8The Real Deal. How Kanye’s Former Malibu Mansion Showed the Cracks in a Home Flipper’s Model Belwood raised roughly $7.5 million more from close to 400 fractional investors to pay for renovations.2Elle Decor. Kanye West Malibu Mansion Details
Renovation work paused in March 2025, and the property remained a concrete shell.9Architectural Digest. The Saga of Kanye West’s Tadao Ando Mansion By November 2025, Belwood was more than $814,000 behind on the $18.5 million loan, which had since been sold by CV3 to Pasadena-based MZ Brokerage. Quality Loan Service Corp. issued a formal notice of default, warning that the property could be lost if payments were not caught up within 90 days.10Realtor.com. Kanye West Steven Bo Belmont Foreclosure Malibu Beach House
With the Chapter 7 conversion and the lifted stay, MZ Brokerage was free to proceed with foreclosure. The potential sale price could fall as low as the $18.5 million owed on the loan.11Canyon News. Kanye West’s Former Home Goes Into Foreclosure
What the Collapse Means for Belwood Investors
Belwood operated as a fractional real estate platform. Through a mobile app, individuals could invest as little as $1,000 toward a luxury property, receiving a deed of trust in return. The firm’s model called for crowdsourcing up to 20 percent of a project’s cost from investors and splitting sale profits 50/50 with them.12Yahoo Finance. Belwood Investments Acquires Corona Del Mar Property
On the Malibu project, the acquisition lender held senior secured debt of $18.5 million and a 50 percent equity position. The nearly 400 fractional investors sat behind that lender. If the property sells at or near the loan balance in foreclosure, little or nothing is left for them. The Chapter 7 case was initially designated as a no-asset case on the docket.
A separate $4.3 million Corona Del Mar oceanfront property that Belwood bought in early 2025 using $1.6 million in investor funds was still listed as under construction at last report, and its status within the bankruptcy estate is unclear.12Yahoo Finance. Belwood Investments Acquires Corona Del Mar Property
Before the default was public, Belmont launched a program called “Populis” that sold blockchain-secured “SmartDeeds” in the Malibu property, with membership tiers from $1,000 to $300,000 and a projected after-repair value of $57.5 million.13New York Post. Kanye West’s Former Malibu Home Is Facing Foreclosure The listing agent for the property said the foreclosure would “seriously halt progress” with Populis.
Who Bo Belmont Is
Steven “Bo” Belmont founded Belwood in 2018 and has said he began learning the house-flipping business while serving a prison sentence.14Realtor.com. Kanye West Malibu Buyer Criminal History In August 2013, Belmont was involved in a violent altercation with neighbors at a rental property near Lake Berryessa in Napa County and struck a man with a pitchfork, causing skull fractures and traumatic brain injury. A jury convicted him of mayhem, two counts of assault with a deadly weapon, and battery with serious bodily injury, and the court sentenced him to five years in prison.15Casemine. People v. Belmont, No. A144613
Related Legal Matters
DRE Discipline Against Megan Belmont
The California Department of Real Estate pursued a disciplinary action against Megan Louise Belmont (also known as Megan Louise Price), a salesperson who represented Belwood in property transactions. The DRE alleged she received disclosures of significant defects, including a cracked furnace heat exchanger and recurring roof leaks, during Belwood’s 2019 purchase of an Orangevale property, and then failed to disclose those defects when Belwood resold the home in 2020.16California DRE. Second Amended Accusation No. H-7096 SAC A May 2024 settlement suspended her real estate licenses for 120 days (90 days stayed, conditioned on payment of a $9,000 penalty) and ordered her to pay $3,596.50 in investigation costs.17California DRE. Stipulation and Agreement in Settlement, H-7096 SAC The action was against Megan Belmont personally, not against Belwood Investments as an entity.
Belwood’s Trespass Suit Against Michael Martin
In April 2024, Belwood filed a civil suit in Los Angeles County Superior Court against Michael Martin, alleging he trespassed onto a Belwood property in late March 2024 and directed landscapers to cut down trees, plants, and mature vegetation. The complaint sought damages for lost property value, replacement costs, and punitive damages.18UniCourt. Belwood Investments LLC v. Martin Martin filed a cross-complaint over an insurance dispute, which the court severed. The case remains open with no trial date set at last report.19Rulings.law. Belwood Investments LLC v. Martin, 24SMCV01645