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Pacha's Old Owner Eddie Dean Is Trying To Buy Infamous Williamsburg Nightclub Verboten
By
Kellylouise Delaney
Published Jun 9, 2016
Modified Jun 9, 2016
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via Yelp
By
Kellylouise Delaney
Published Jun 9, 2016
Modified Jun 9, 2016
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The owners of bankrupt Williamsburg nightclub Verboten are auctioning off the lease at 54 North 11th Street in an attempt to pay back some of the club's many debts. And according to legal documents obtained by Gothamist, the high bidder is New York City nightlife impresario Eddie Dean—the longtime owner of NYC's now-deceased bridge and tunnel refuge, Pacha.
According to the lease purchase agreement filed with the U.S. Bankruptcy Court between Verboten and 54N11BK, LLC, of which Eddie Dean is a managing member, his bid for the lease is $400,000.
In late March, Verboten was seized by the New York State Department of Taxation & Finance for nonpayment of around $360,000 in sales tax. The day after the club's seizure co-owners Jen Schiffer and her husband John Perez filed for chapter 11. A few days later, Schiffer was arrested for allegedly passing bad checks.
The lease purchase agreement states that Verboten has had discussions with at least three other potential purchasers, one of whom made a bid higher than Dean's; however that bid is contingent upon the landlord's agreement to certain modifications to the lease.
According to a letter from one of Verboten's investors dated June 1st, some investors and former employees want to "purchase the assets out of bankruptcy and fund a continuation of the Brooklyn Events business in a new corporation," suggesting that they might also make a bid for the lease.
The deadline to make a bid is July 13th, and the court hearing for the sale of the lease is scheduled for July 20th.
At the bankruptcy hearing on May 6th, Schiffer denied responsibility for the bad checks she was arrested for in April, alleging that two managing employees are at fault. She claimed these employees stole a checkbook from the club's safe and cut checks amounting to thousands of dollars to themselves and other employees, forging Schiffer's signature. The bad checks she issued then bounced, she alleged, because she was unaware of the account's diminishing balance.
Schiffer denied transferring any assets prior to declaring bankruptcy. She also revealed on May 6th that the club had not yet paid rent for April or May, and that it was operating to break even.
When Robert Meloni, an attorney representing some of the club's investors, questioned Schiffer about four bounced checks Verboten issued to Ward Security in October and November of 2015, she denied knowledge of the "random" checks.
Earlier this year, Schiffer and Perez were sued by former employees who accused the couple of operating Verboten "with a complete disregard for the law and have committed a staggering number of unlawful acts against their employees." They also say Schiffer once told employees they "cannot book a Black people party" at the club.
On May 26th, the U.S. Trustee supervising this bankruptcy case, William K. Harrington, made a motion to the court to convert Schiffer's chapter 11 bankruptcy filing to chapter 7 on the bases of engagement in "gross mismanagement," using club funds to finance other business interests and personal expenses, and failing to account fully for the club's cash income.
If granted, the conversion from chapter 11 to chapter 7 would assume that the club is financially beyond reorganization, revoking control of the estate from Schiffer. It would also force the club to close.
Neither Verboten nor Eddie Dean have responded to several requests for comment.
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pacha
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Kellylouise Delaney
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