A partnership led by Philipson plans to buy the debt and equity stake in the 183-room hotel from All Year Holdings’ bondholders for about $157 million, after All Year filed for bankruptcy in December to stave off insolvency lawsuits, according to documents filed in the Bankruptcy Court for the Southern District of New York.
All Year’s Israeli bondholders approved Philipson’s proposal in May, beating out Brooklyn landlord Zelig Weiss, who owns a 50 percent stake in the hotel at 111 North 12th Street and wanted to take full ownership of the property, The Real Deal first reported.
Weiss, who attempted to take control of the Williamsburg hotel once before, accused All Year in a lawsuit last year of funneling cash out of the property, and his lawyers argued that Philipson’s purchase was “troubling” because Weiss initially offered about $2 million more than Philipson, according to court documents.
Phillipson’s group, which includes Whalley Capital Group’s Stephen Gorodetsky, upped its offer by $2 million to increase the principal on debt the group intends to issue, once the deal closes in July. The William Vale had received interest from multiple investors before Philipson, with Monarch Alternative Capital and Madison Capital proposing a bid of $155.2 million to purchase the hotel in October. The property brought in about $7.5 million in revenue in the month of April alone, according to court documents filed in May.
Weiss previously made a larger all-cash offer to buy the debt on the hotel for $180 million in two installments or $163 million in one payment, though the hotel’s bondholders chose not to vote on the proposal in October. Instead, the bondholders approved the last-minute bid by Philipson, who previously entered into an agreement to purchase an All Year portfolio of apartments across Bedford-Stuyvesant, Bushwick and Williamsburg with another investor. That deal is expected to close in August.
Philipson operates nursing homes and is the son of Bent Philipson, who has invested in multiple long-term care facilities in New York and New Jersey. Both invested in a poorly rated nursing home in Long Island that a judge ruled had violated federal trafficking laws by forcing underpaid Filipino nurses to keep working, Newsday reported.
Weiss, Philipson and All Year did not immediately respond to requests for comment.
Celia Young can be reached at firstname.lastname@example.org.