Sometimes when the lights come on at the club, you finally see just who you were dancing with.
That’s how unsecured creditors of bankrupt nightclub Brooklyn Mirage might be feeling. The group pulled its support for a bankruptcy plan that would have sold the venue to Axar Capital Management LLC after finding out the debt fund had struck a deal with a third party. The withdrawal was first reported by Bloomberg Law.
The unsecured creditors appear to have first heard about the deal in the pages of BKMAG, which reported on New Year’s Day that Axar was expecting to enter a deal with global nightlife brand Pacha and its parent FIVE to sell the Mirage and turn it into Pacha New York. BKMAG attributed the information to an anonymous industry source.
The about-face by creditors is the latest twist in a saga that seemed to finally be coming to an end. The popular venue Brooklyn Mirage, owned by the company Avant Gardner, began undergoing a comprehensive renovation in 2024. It sold a season of tickets for the following year and then canceled every show. The debacle ultimately ended in Avant Gardner’s parent company filing for bankruptcy last August, reporting $153.3 million in funded debt obligations.
An Axar affiliate won court approval in October to buy the Mirage stage and other assets from Avant Gardner in a $110 million credit bid, according to Bloomberg Law. Creditors would get a payout if Axar was able to reach a certain monetary threshold.
Axar, meanwhile, allegedly negotiated the deal with Pacha’s parent in the dark, away from the eyes of creditors and the court.
After learning of the plans in the news, the creditors approached Axar’s counsel, who allegedly said the reports were incorrect, although discussions were allegedly ongoing. Then, on January 12, the creditors’ attorney was allegedly told the deal was all but done.
The creditors will not sign off on any plan that permits the “trickery Axar has attempted,” they wrote to the court. The deal “destroys the value” of parts of the plan and Axar hasn’t permitted the terms of the deal to be shared with the Delaware bankruptcy court or with the Mirage parent’s board of directors.
The affiliate’s deal with Pacha and its parent FIVE includes a purchase option that, if exercised, would wipe out a potential payout to the unsecured creditors. The creditors include vendors and artists who worked with the club.
Axar has asked the court to determine that the creditors are unreasonably withholding their support. Axar is pursuing the demolition and rebuilding of the Mirage, but needs a partner to finance the process as well as $2 million in monthly costs for the closed stages.
The creditors can’t turn around and fight a plan they once endorsed just because their assumption that they would get a payout turned out to be false, Axar argued to the court.
“[N]o party submitted a proposal valuing the enterprise higher than the offer from the venue management firm,” the company wrote. “This is the unfortunate reality all of the parties have to live with.”
Axar did not immediately respond to a request for comment.
The Avant Gardner complex that included the Mirage was one of the largest clubs in New York, at 80,000 square feet. The Mirage opened in East Williamsburg in 2017 and became a popular venue for electronic music, despite fights with the state liquor license authority and community board.
In 2024, the company brought on new CEO Josh Wyatt to manage a revamp of the Mirage stage. The club closed for what was supposed to be a massive renovation. But just before it was supposed to open for a full summer of shows, the city’s buildings department yanked its permit.
Although Mirage owners said the venue was show-ready, the buildings commissioner told Brooklyn Paper the revamp was “combustible” and “illegal.” As shows were canceled, 90,000 ticketholders were left at least temporarily in the lurch. Wyatt was fired in May of 2025, and Avant Gardner filed for bankruptcy three months later.
A confirmation hearing for the bankruptcy plan is currently scheduled for February 12.
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