After three years of drama, the bankrupt Williamsburg Hotel could soon begin a new chapter.
The trendy 147-key property developed by Toby Moskovits and Michael Lichtenstein at 96 Wythe Avenue is set to be sold to London-based hospitality firm Quadrum Global for $96 million, according to a court filing.
The news comes six months after Moskovits and Lichtenstein were stripped of control of the hotel by a federal bankruptcy judge, who appointed an independent trustee to oversee the bankruptcy process after ruling that the debtors couldn’t be trusted “to deal like fiduciaries.”
The trustee selected Quadrum as the buyer after appointing A&G Real Estate and Eastdil Secured to market the property in August.
A bankruptcy judge still needs to approve the sale and a hearing is set for next week. Quadrum, however, is in the lead position to acquire the property.
Facing a foreclosure attempt by lender Benefit Street Partners, Moskovits and Lichtenstein brought the hotel to Judge Robert Drain’s White Plains bankruptcy court in 2021.
Read more
Commercial
New York
Eastdil and A&G seek to broker sale of bankrupt Williamsburg Hotel
Commercial
New York
Toby Moskovits’ Williamsburg Hotel enters bankruptcy
Benefit Street’s lawyers argued that Moskovits’ group siphoned money out of the hotel. Moskovits and Lichtenstein denied the allegations and claimed their lenders, which also included Fortress investment Group, which was also trying to foreclose, were predatory.
“I guess Fortress and Benefit Street are in a competition on who is the biggest asshole lender in New York City,” Lichtenstein said in a deposition last year.
The case turned uglier when an independent examiner was appointed to look into the debtor entity’s transactions.
After analyzing 50 bank accounts, conducting 11 interviews and reviewing over 10,000 pages of documents, the examiner report was released last year.
“The investigation uncovered evidence of a complex scheme to divert and siphon substantial amounts of money from the debtor,” the report stated, detailing $12.5 million in funds distributed to entities owned directly or indirectly by Moskovits and Lichtenstein and the debtor entity’s lack of tax returns for at least three years before the bankruptcy filing, among other things.
Lichtenstein fought back by assailing the examiner, alleging that he “misused his position” and “instead acted as a passionate advocate for the Benefit Street Partners’ claims and positions.”
Judge Drain ultimately ruled against Lichtenstein and Moskovits, leading to the appointment of the trustee to control the hotel last summer.
The record “shows a series of serious and I believe willful failure to disclose and appropriation of assets that are — that should not have been undertaken by the fiduciary” said Drain at a hearing. “At times, some of those actions also appear to me to rise to the level of fraud.”
The appointment of the trustee did not mark an end to the legal battles. Lichtenstein and Moskovits’ lawyer claim the hotel’s trademark along with its slogan, “Sleep With a Local,” are owned by Moskovits. The trustee has refuted these claims, essentially calling them nonsense.
Quadrum Global, led by Oleg Pavlov, has over $1 billion in assets under management, according to its website. It also owns the Arlo Midtown, Arlo NoMad and Arlo Soho boutique hotels in Manhattan and the Nautilus by Arlo in Miami Beach.