A bitter fight between Brooklyn real estate heavyweights Zelig Weiss and All Year Holdings over the swanky William Vale hotel is nearing an end.
All Year and Weiss are close to an agreement to settle a legal dispute in which an entity tied to the company alleged Weiss diverted money from the Williamsburg hotel, according to a court filing.
The All Year entity sued in June alleging that Weiss, who runs the hotel, refused to pay rent while the hotel was operating. The lawsuit also charged that tenants controlled by Weiss skipped out on rent despite receiving more than $7 million in forgivable Paycheck Protection Program loans.
Those grievances should soon be in the past. After a judge in December denied Weiss’ motion to dismiss the case, the parties agreed to resolve their issues outside of court. This week, Weiss and All Year’s entity agreed to pay $7.5 million to All Year’s lender, a trustee of Israeli bondholders. The court allowed the parties another month to reach a deal.
The lawsuit exposed the byzantine ownership structure set up by Weiss and All Year founder Yoel Goldman.
All Year Holdings and Weiss each had a 50 percent stake in a company that owns the property, according to Israeli stock exchange filings. That company, Wythe Berry Fee Owner, leases the property to an entity equally controlled by Weiss and Goldman. And Weiss manages and runs the property, where rooms start at $345 per night and the penthouse duplex will set you back $15,000.
The matter became more complicated when Weiss and Goldman had a falling out and sued each other. An effort in 2019 to have a rabbinical court settle the matter failed. Later, Goldman was forced to step aside at All Year as the company missed payments to the bondholders and restructuring officers were put in charge.
Things got crazier still. In late October, Weiss, who was being sued for allegedly diverting money from the hotel, attempted to buy the property, offering $156 million for the equity interests in the hotel and the bondholders’ debt. He later upped the offer to $163 million, claiming to have lined up financing.
The Israeli bondholders, however, rejected it in favor of a proposal by Monarch Alternative Capital and Richard Wagman’s Madison Capital to purchase the debt.
Goldman and Weiss in 2016 had partnered to develop the 183-key hotel and office complex. The William Vale boasts the longest outdoor pool in New York City, a rooftop bar and a restaurant led by Chef Andrew Carmellini’s NoHo Hospitality Group.
All Year, which controls over $1 billion in Brooklyn assets, filed for Chapter 11 bankruptcy in December.
An attorney representing All Year’s entity declined to comment. A lawyer representing Weiss did not return a request for comment.