The owner of half of Brooklyn's William Vale Hotel is suing in bankruptcy court to stop the other piece of the property from being sold off to a new owner, claiming he would lose the right to be an equal partner — though that was never part of the original deal.
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Zelig Weiss is seeking an injunction on the sale, The Real Deal reports, arguing that if current owner All Year Holdings goes through with its plan to sell its stake to healthcare investor Avi Philipson, Weiss will lose the controlling interest that is rightfully his. Weiss is arguing that he and All Year are meant to remain partners, according to the publication.
In March, All Year reached a deal to sell all its Brooklyn apartments and restructure its debt in order to exit bankruptcy. More than 100 assets were taken over by Graph Group, which Philipson leads, and Rubin Schron’s Cammeby’s International.
The companies agreed to pay All Year $60M, $40M in cash and $20M in promissory notes, to take over all the equity in the company, All Year's attorney told a bankruptcy judge at the time. The William Vale, a 183-key hotel that opened in May 2016, was not part of the deal.
Weiss was set to take full ownership of the property in April, per TRD, but a month later, All Year struck an arrangement to sell to Philipson. Weiss claims his six-year-old deal with All Year sets out they will remain partners and would be illegally broken if the sale to Philipson goes ahead.
Further, because All Year and Weiss own the property through an LLC of which All Year claims to be the controlling member, a sale would force Weiss into a position of deferring to Philipson, per the complaint. Weiss is arguing that he should take ownership of the hotel.
“All Year is attempting to use this transaction structure to bypass the transfer restrictions” Weiss’ lawyers argued in the complaint, according to TRD.
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