David Paz puts 225 Bowery hotel entity in bankruptcy, pressured by $10.4M judgment

David Paz, who owns Omnia Group, which partnered with Northwind Group to own the 200-room hotel at 225 Bowery, filed for bankruptcy protection for his entity 225 Bowery LLC. Nat Wasserstein is the chief restructuring officer who filed the petition. David Paz filed the petition following a $10.4 million arbitration judgment owed to the Ace Group. The hotel had previously been operated under the Sister City hotel brand, which is part of the Ace Group collection.
Ace won the arbitration in September 2022, and on October 3, 2022, Ace filed a case in New York State Supreme Court seeking to confirm that award, and later that month, a judge did just that. On October 28, 2022, a judgment for $10.4 million was entered.

This bankruptcy seeks to block or mitigate that transfer. According to the petition, “The Transfer was made while the Plaintiff was insolvent. Plaintiff is entitled to the presumption of insolvency for the Transfer made during the Preference Period pursuant to 11 U.S.C. § 547(f).”

Paz, through his attorney, avers that the cashflow for the hotel in a recent state court filing, now operating as Untitled at Freeman Alley, is going well, but that the Ace has placed, “a restraint… on the Hotel’s only source of revenue… and Ace Group has refused to lift or modify that restraint, despite the risk to the Hotel’s continued operation and the Hotel Owner’s willingness to enter into a new stipulation that would fully protect Ace Group’s rights… Ace Group has made it clear – through its correspondence and refusal to counter the Hotel Owner’s proposed terms – that, until the parties reach an agreement on terms of a revised Lockbox Stipulation, it will not lift or even modify the restraint it has placed on the Hotel’s only source of revenue: accounts held by Airbnb, Inc., the third-party vendor the Hotel uses for guest reservations and payments (the “Airbnb Account”). (At present, over $1.2 million is being restrained in the Airbnb Account.) ”

Bankruptcy LINK

Direct link to the property’s ACRIS page and link to DOB NOW portal.