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Judge Dismisses Zelig Weiss’ William Vale Hotel Suit

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The William Vale, Getty in Williamsburg

It’s been a rough few weeks for Zelig Weiss.

A federal bankruptcy judge has dismissed the Brooklyn developer’s bankruptcy. lawsuit against All Year Holdings, His partner at the William Vale Hotel argued that the transaction to sell the property was illegal. I am asking for a fine.

The ruling should have largely closed the door on Weiss’ comeback attempt to take control of blue-chip stocks. fiercely contested Williamsburg property.

But last week, new wrinkles appeared. The All Year bondholder, who is apparently tired of all the lawsuits surrounding the hotel, has filed a petition to have All Year’s stake in the property sent to bankruptcy. A judge has yet to rule on the petition, and it is unclear how that will affect the rest of the proceedings.

Weiss’ run at the William Vale Hotel is one of Brooklyn’s most dizzying real estate dramas. The hotel was co-developed by Yoel Goldman of Weiss and All Year in 2016, and the following year Goldman refinanced the property on the Israeli bond market.

However, Goldman soon ran into problems with bondholders. By the time the pandemic hit him in early 2020 and he closed the doors of William Vale, foreclosures and investor brawls were mounting. Restructuring officials eventually pulled the reins from Goldman and put All Year Holdings in bankruptcy protection late last year.

To repay bondholders, restructuring officials have considered selling the all-year $1 billion Brooklyn real estate portfolio. This consisted mostly of walk-up apartments in the borough, aside from its crown jewel, William his veil.

signed a contract with sell the rental portfolio to healthcare executive Avi Philipson’s Graph Group and Brooklyn landlord Rubin Schron’s Cammeby’s International Group. But selling the hotel was a nightmare.

One problem is the complex ownership structure of Goldman and Weiss. The partners not only split the ownership of the hotel, but also the land lease. In a feat of financial engineering, Goldman and Weiss found a way to lease real estate from themselves.

The main reason is that any buyer of All Year shares in this property must partner 50/50 with Weiss. Over the past year, Weiss has faced lawsuits from All Year, accused of siphoning money from hotels.

Last October, Weiss made a surprising bid. get a hotel bond The 50% equity stake for the full year is $163 million. All-Year bondholders scrapped the deal and instead accepted offers from Monarch Alternative Capital and Richard Wagman’s Madison Capital.

However, the deal with Madison fell through, and Weiss came back to the table in an offer of $157 million in April.

By that point, it seemed all but certain that Weiss was finally looking to take control of the hotel, but in an 11th-hour twist, the All Year bond holders: Group led by Phillipson.

Since then, Weiss has tried to block the sale of Phillipson. In a complaint filed in bankruptcy proceedings against Allyear, Weiss argued that a 2016 agreement with Goldman Sachs was supposed to ensure they remained partners. Weiss also claimed that Allyear was not authorized to transfer ownership, which Allyear disputed.

“Weiss’ only connection to the Chapter 11 case is that he is a failed bidder on the William Vale Hotel,” All Year said in a statement at the time.

But last week’s bankruptcy judge’s ruling dismissing Weiss’ claims may have come too late for the full year. Bondholders now say they are entitled to Philipson’s $7.5 million deposit.

For now, this means Allyear controls the assets while Wyeth holds a 50% non-controlling stake.

As part of state court proceedings, Allyear is seeking to exclude Weiss and his company from the hotel’s ground lease. All Year he said in late September that four companies he allegedly had ties to Weiss had to comply with a subpoena to turn over the hotel’s financial records. I have received good news. Otherwise, each he will be charged $250 per day.

In another twist to the lawsuit story, Goldman sued personally Weiss alleged in September that he was illegally getting rich with hotel money. Goldman alleges that Weiss refused to hand over financial information and sabotaged attempts to collect records.

Weiss’ legal team now alleges that Goldman did not respond to him adequately.Weiss’ attorneys also claimed that Goldman’s legal team demanded that Rosh Hashanah be handled too closely, and that Weiss would not respond. claimed to have become difficult to

All Year is represented by Matthew Paul Goren of Weil, Gotshal & Manges and Janice Goldberg of Herrick Feinstein. Neither Weiss nor his attorney responded to a request for comment.

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