A bitter, nearly two-year battle over the fate of one of Brooklyn’s hottest hotels has finally come to an end this week.
Chief Bankruptcy Judge Martin Glenn of the Southern District of New York on Wednesday approved the sale of Williamsburg’s William Vale Hotel to high-end hospitality group EOS Hospitality for $177 million, said attorney Stephen Selbst, a partner at the firm Herrick Feinstein, who represented the debtor, limited liability company Wythe Berry Fee Owner, in the Chapter 11 bankruptcy protection case. The decision now clears the way for the sale next month, he said.
Glenn’s ruling comes almost two years after Israeli creditor Mishmeret Trust first commenced the “involuntary” Chapter 11 filing, in October 2022, against Selbst’s client. The move to bankruptcy court was a “tactical decision” to speed up the rate at which it would receive payments that had been delayed as part of Wythe Berry Fee Owner’s financial struggles, Selbst said.
The 22-story, 183-room luxury hotel at 111 N. 12th St., which also includes 40,000 square feet of storefronts and office spaces, has for years been at the center of a contentious and complicated legal dispute between its two original owners and co-developers, Yoel Goldman and Zelig Weiss.
The two partners developed the hotel at Wythe Avenue, on the edge of McCarren Park and with views of the water, for $130 million in 2016, and refinanced it a year later with Israeli bonds for $166 million.
Goldman, the founder of the now-defunct Brooklyn real estate firm All Year Management, was let go from his position running the hotel because All Year had defaulted on those loans, according to Selbst. So from 2017 through 2023, Selbst said, Weiss had been the sole operator of the William Vale until agreeing to give up his own stake in the property last September.
The debtor in the case — Wythe Berry Fee Owner — is composed of a number of overlapping entities and their subsidiaries that Selbst characterized as having a “complicated ownership chart.” They include parts owned by both Weiss and Goldman, including a limited liability company called Wind Down, which is the successor to All Year Holdings.
According to Selbst and the federal court filings, Goldman filed a motion earlier this month in an attempt to stop a sale of the hotel after Weiss and the creditors had agreed on the settlement figure of $177 million, claiming that he too was owed part of the proceeds.
But the judge dismissed Goldman’s objection and announced Wednesday that he’s moving forward with the sale. Weiss stands to receive about $3.4 million as part of the settlement, said Selbst.
“Settlements are welcome in bankruptcy because they prevent costly litigation between parties and contribute to the efficient administration of the bankruptcy estate,” Glenn wrote in his decision.
The hotel’s prospective buyer, EOS hospitality — which is headquartered on Madison Avenue and whose portfolio of high-end resorts includes The Perry in Key West, Florida; L’Ermitage in Beverly Hills, California; and The Tides Beach Club in Kennebunkport, Maine — did not respond to a request for comment about its plans for the property.
Attorneys for Weiss and Goldman also did not respond to requests for comment.
Julianne Cuba , 2024-05-31 22:50:55
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