Randy Settenbrino hopes bankruptcy only happens once in a Blue Moon. Unfortunately, it did this week.
Settenbrino, the owner of the Blue Moon Hotel on the Lower East Side, filed for Chapter 11 on Wednesday, Bisnow reported. The property, at 100 Orchard Street, has racked up $11.2 million in liabilities, according to the filing.
In the filing, Settenbrino detailed a sordid several years for the property, starting with a 2015 lease agreement with El Idi that came about because of a personal family situation. The lease was a “huge mistake,” the filing claimed, because Idi opened a hostel on the property.
Not only that, but Idi failed to pay rent and real estate taxes and let the property fall into disrepair, according to a lawsuit Settenbrino brought, Bisnow reported. The two sides came to an agreement but Idi allegedly defaulted and left at the start of the pandemic, still owing more than $3.3 million, according to Settenbrino.
Idi then sued Settenbrino months later over a lease-to-purchase option.
Settenbrino also attempted to use the hotel as a New York City homeless shelter. That plan fell apart, however, after lender Brick Moon Capital attempted to foreclose on the property, according to Bisnow.
According to Settenbrino, the Blue Moon property was placed into receivership after Brick Moon made another attempt to foreclose in January 2021. The asset is supposedly worth $21 million.
Settenbrino opened the Blue Moon Hotel in 2006 after expensive renovations and has been trying to mend its finances ever since. In 2014, the property was listed for $19 million with YGNY Realty. Last year, the company resorted to GoFundMe, where it has since raised a little more than $7,500.
The Blue Moon Hotel might be waning, but according to Crain’s, Settenbrino noted in his affidavit that he did not expect the bankruptcy filing to spell the end of the establishment.
The pandemic has flung the hotel sector into distress. This month, Host Hotels & Resorts agreed to sell the Sheraton New York Times Square for $356 million, or $382 million less than it had paid in 2006.
[Bisnow] — Holden Walter-Warner