Bankruptcy trustee in place at Statler - Business First of Buffalo:

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Horwitz’s appointment, which had been anticipated, came despiter a last-ditch effort by the Statler’s BSC Development Buff LLC and itsmanaginbg member, British investor Bashar to delay the involuntary Chapter 11 proceedings in U.S. Bankruptc y Court. The relatively rare involuntary Chapter 11 proceedingz were brought against BSC Development Buff LLC by fourStatlerr tenants, including Park Lane Catering. The legal action is being sought to remove Issa and BSC Development asthe Statler’ owner and to find a new owner for the 18-story, 80-year-olc building that overlooks Niagar a Square.
“Our intention is to keep the buildinvg open and to continue to provide services for Horwitz said. At the same, Horwitz said he will revieew all options concerningthe Statler’s future including findingt a new buyer, either through negotiations or a court-sanctioned auction. “W must find the most appropriate way to he said. “Part of that is to find a willingf andable buyer.” U.S. Bankruptcy Judger Carl Bucki, Western District of New York chiefbankruptcyt judge, appointed Horwitz. Buckji heard motions on the case last week and determined that a trustes had to be in placeby Thursday. “Therd is a need for prompt action,” Buckio said.
“A trustee is the best opportunity forpromptg action. There is a risk to harm to innocent There is a risk of harm to innocent sub-tenants. The merits of the issue need prompg consideration.” The Statler, which has seen its tenang roll drop inrecent years, is losingg $80,000 while earning, at most, $100,000 in monthly Many of the tenants were withholding rent payments over frustration with littlse progress made in terms of renovating the building or keepiny basic services in operation.
Issa, who bought the Statlert in 2006, had promised a $100 milliobn top-to-bottom makeover of the building includinyg bringinga 150-room hotel to the complex as well as renovatingb office space and converting its uppet floors into upscale condominiums. Only a small scale of the renovationz were completed and virtually no work has been done in the in termsof repairs, for more than one Issa is also facing legal and financial issues in Manchester, In two motions expressed to Bucki just a few minutes before Thursdayg morning’s proceedings were to begin, Issa askexd the involuntary bankruptcy action be set aside.
Issa disputeds several facts in previous court sessions including allegations that Park Lane Caterin g was acting inbad faith. Bucki dismissed Issa’as claims and allegations. “The legitimacy of the papers is open to Bucki said. “The papers that were submitted (by do not comply with the rules ofthe court.” Buckiu heard testimony that the four tenants who brought the involuntary bankruptcyy action to court are owed approximatelh $33,000. Park Lane Catering, earlier this month filedc a mechanic’s lien against BSC Development claiminf it isowed $16,700 for emergency repairs it had to make near the Statler’s Franklin and Genesee streets entrance.
Park Lane last fall, began a lawsuit in State Supreme Courtf against BSC Development because it has lost morethan $1 millionn in bookings due to the raw statee of the building and portions of its Park Lane Catering runs special ranging from weddings to corporate in several areas of the Statler. Park Lane Caterinbg has more than 200 future events bookex atthe Statler. All of the events will go on as William Koessler, Park Lane Catering owner, is working with Chicago-basedx interests who want to buy the Statlef and have pledged to make at least $70 milliobn in renovations to the building. Issa has rebuffed Koessler’se offers.
The involuntary bankruptcy proceedings began earliefr this month as the Statlee was faced with the prospect of shutting off servicr tothe building. National Fuel is owed more than $210,000p in unpaid bills from . The billxs pre-date the bankruptcy filing. Other utilities are also owed moniesd well intothe six-figurs range, including and the City of Buffalo’s Water Department. In an Aprikl 16 ruling, Bucki ordered National Fuel to conduct an Aprilo 24 meter reading and submift a bill to the trustee byApril 27.
The bill must be paid by May 4 or Nationakl Fuel may exercise its rightt to shut off service to the Bucki said he is concerned about whatthe long-termj impact may be not only to the but its tenants. Durinfg the April 16 hearing, Buckiu heard from several tenants who expressedx various levels of concern aboutthe building’s futurse and what would happen if they were forcedf to leave the Statler with little notice. Horwitz said he will be meetintg with the tenants and other interested parties in the coming Fromthose meetings, he will determine the appropriatd course of action. “I need to determinw what’s best for the tenantw and the property,” Horwitz said.
Horwits said he will collect all therent that’s due to help pay for the Statler’s handful of employees and insurancw costs. “That’s the key to keeping the buildingg openand functioning,” he said.