Brooklyn’s ritzy William Vale hotel to get new owner after court battle

May 31, 2024 – Media Mention
Crain's New York Business

Partner and co-chair of Herrick's Restructuring & Finance Litigation DepartmentStephen Selbst, spoke with Crain's New York Business about a U.S. bankruptcy judge approving the $177 million sale of the William Vale Hotel complex in Brooklyn, which was a significant achievement for Herrick’s client in this complex dispute.

Chief Bankruptcy Judge Martin Glenn of the Southern District of New York on May 29 approved the sale of Williamsburg's William Vale Hotel to high-end hospitality group EOS Hospitality for $177 million, said Stephen, who was part of the Herrick team that 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.

The article noted that Glenn's ruling came nearly two years after Israeli creditor Mishmeret Trust first commenced the "involuntary" Chapter 11 filing, in October 2022, against Herrick'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, Stephen said.

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, explained Stephen. So, from 2017 through 2023, Stephen 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 Stephen 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 Stephen 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 Stephen. 

Herrick Litigation partners Avery S. Mehlman and Janice Goldberg were lead partners on the matter along with Stephen. 

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