William Vale hotel in new dispute with Zelig Weiss, Yoel Goldman
Lodging and office complex missed $7.5M rent payment in February
The shiny William Vale Hotel is among the trendiest spots in Williamsburg. It boasts the longest outdoor pool in New York City, a $6,000-a-night room and a cocktail bar with $18 drinks. “The Bachelor” shot a ceremony there.
But behind the scenes, the hotel and office complex’s leaseholders have been involved in a bitter legal battle.
It centers around Brooklyn developer Yoel Goldman, whose portfolio has been plagued by defaulted loans and claims of fraud. The affairs of All Year Holdings, through which Goldman has issued hundreds of millions of dollars worth of Israeli bonds, have largely been in the hands of externally appointed restructuring officers since December.
All Year now alleges that an entity to which it leases the hotel, which Goldman co-owns with Zelig Weiss, stopped paying rent while the hotel’s revenue was used for a “self-dealing enrichment scheme for the ongoing benefit of Weiss,” according to a complaint filed on Friday in Brooklyn Supreme Court.
The suit, like everything else happening to All Year, is complicated. While both the fee owner and ground lessee are linked to Goldman, he does not appear to control either entity. According to the lawsuit, Weiss is responsible for business decisions at the hotel complex.
In the complaint, which was signed by All Year associate restructuring officer Ephraim Diamond, the All Year subsidiary seeks to terminate the lease and eject the lessee over unpaid rent. The suit also seeks to enforce rent guarantees made by Goldman and Weiss.
It further seeks financial information from the lessee, which it alleges has not paid rent — yet did pay fees to a management company owned by Weiss.
A representative for All Year Holdings declined to comment. Weiss and his attorney did not respond to a request for comment.
The 183-key hotel and office complex serves as the collateral for nearly 580 million shekels ($180 million) in Israeli bonds issued by All Year in 2017. In a public disclosure on the Tel Aviv Stock Exchange, All Year said that the lessee entity missed a $7.5 million semi-annual rent payment in February.
The LLC cited a reason for skipping rent: the pandemic. But according to the lawsuit, the hotel was half-full in March and was generating revenue.
Moreover, two Weiss-controlled sub-tenants at the property have landed more than $7 million in forgivable Paycheck Protection Program loans, according to public records cited in the suit.
Holders of All Year’s William Vale-backed bonds are clearly worried. In April, Mishmeret Trust Company, an Israeli firm that acts as the senior lender for the bonds, declared them in default.
The pressure All Year is facing from both sides could “ultimately lead to foreclosure and loss of the Complex to the detriment of all, while Weiss continues to divert monies from the Complex to benefit his own affiliated entity,” the complaint says.
This isn’t the first time that Weiss and Goldman have been at odds over their Brooklyn holdings. In April, Goldman sued Weiss and other partners over a 2017 settlement involving a redistribution of ownership in three Williamsburg parcels.
In late 2019, All Year announced plans to sell or refinance both the William Vale and the nearby Denizen Bushwick rental complex to pay off the Israeli bonds backed by those trophy assets. But the pandemic complicated matters, and the bonds were suspended at the end of 2020 after the developer missed payments.
In February, an All Year LLC declared bankruptcy to stop Mack Real Estate, which provided a $65 million mezzanine loan for one-half of the Denizen Bushwick luxury apartment project, from foreclosing on it.