Yoel Goldman emerges to sue Zelig Weiss in William Vale dispute

Sidelined from his own development firm, embattled Brooklyn landlord Yoel Goldman is personally stepping into the messy battle over Brooklyn’s chic William Vale hotel.

Goldman is suing Zelig Weiss, his estranged partner in the Williamsburg property, alleging that Weiss has illegally enriched himself with the hotel’s money for years. Goldman wants a judge to compel Weiss to open the hotel’s books and prevent him from destroying records before an upcoming mediation hearing.

The lawsuit is the latest twist in the bizarre and increasingly convoluted ownership dispute over the William Vale, one of Brooklyn’s few luxury hotels.

Only six months ago, Weiss appeared to have a deal in place to buy the hotel from Goldman’s firm, All Year Holdings, which Goldman still owns but is now controlled by an appointed restructuring officer.

For unclear reasons, Weiss’ deal fell through. Instead, Israeli bondholders, who hold the hotel’s debt, struck a deal with a group led by a young healthcare investor, Avi Philipson. Then Philipson’s group failed to close by an August deadline.

To make matters even more confusing, an entity tied to All Year Holdings is suing an entity tied to Goldman and Weiss, Wythe Berry, which leases the hotel. In the lawsuit, the All Year entity alleges Wythe Berry stopped paying rent. In June, All Year filed a motion to eject Wythe Berry from the lease.

This is where Goldman’s new lawsuit comes in. Goldman alleges that Weiss is the one to blame for the missed rent payments and that Weiss has refused to turn over financial records and stonewalled attempts to collect information.

Goldman further claims that Weiss has diverted millions of dollars from the hotel’s cash flow to an entity he fully owns, violating a contractual agreement.

Goldman also alleges he never approved nor was informed about the $7 million in federal PPP funds that Weiss reportedly obtained for the hotel and that Weiss has caused Wythe Berry to rack up hundreds of thousands of dollars in legal fees by refusing to pay rent to All Year.

Goldman and Weiss’s venture began in 2013. Goldman oversaw the funding, financing and refinancing of the hotel project, while Weiss was in charge of the property’s day-to-day management after it opened in 2016.

In 2017, Goldman used the hotel as collateral when he raised money on the Israeli bond market to refinance debt.

But by 2019, Goldman’s All Year began facing financial issues and lawsuits. In 2020, it missed payments to bondholders and Goldman was removed from decision making as the firm’s properties began fending off foreclosures. A year later, All Year filed for bankruptcy, but Goldman remains its primary shareholder.

In March, All Year and the Israeli bondholders agreed to sell most of All Year’s massive Brooklyn apartment portfolio to Avi Philipson’s Graph Group and Rubin Schron’s Cammeby’s International Group. That deal has also yet to close.

The William Vale was not included in the deal, because a separate set of bondholders own its debt. A plan to sell the hotel’s equity and debt to Monarch Alternative Capital and Richard Wagman’s Madison Capital fell through in October. Weiss then stepped in with his second attempt to buy the hotel.

After All Year reached a deal to sell the hotel to Philipson’s group in May, Weiss filed a complaint in bankruptcy court alleging that the Philipson sale violated an earlier agreement with Goldman and that any transfer of the property requires his approval.

There is some good news on the horizon. Weiss, Goldman, All Year and a Philipson-led LLC are heading to mediation in the coming weeks to resolve disputes over All Year’s Chapter 11 bankruptcy plan.

PincusCo first reported the news on the latest Goldman lawsuit. Neither Weiss, All Year, nor Weiss or Goldman’s attorneys responded to a request for comment.