Quadrum Global Takes Over Williamsburg Hotel After Torrid Legal Battle
The long, bitter legal feud over the boutique Williamsburg Hotel — spanning from intellectual property disputes to fraud allegations — has finally concluded, with hotel developer Quadrum Global emerging as the new owner.
Quadrum closed on its $96M purchase of the 147-room Brooklyn hotel after a bankruptcy trustee selected the UK-based firm as the buyer in January, The Real Deal reports. Toby Moskovits’ Heritage Equity Partners, the hotel's developer and former owner, put the property into bankruptcy in 2021 after first defaulting on a loan on the property in 2019.
The property’s lender, Benefit Street Partners, had sued to foreclose on the property, and accused Moskovits and her partner, Michael Lichtenstein, of taking money out of the hotel. While Lichtenstein and Moskovits denied those claims, an independent investigation found some $12.5M had been delivered into companies controlled by Moskovits and Lichtenstein.
“The investigation uncovered evidence of a complex scheme to divert and siphon substantial amounts of money from the debtor,” the report read, per TRD. The examiner looked at 50 bank accounts and over 10,000 pages of documents. A bankruptcy judge said last year, in ruling for Benefit Street, that the actions of the Heritage Equity principals amounted to willful failure to disclose and appropriate assets that appeared to "rise to the level of fraud," TRD reported.
The previous owners have continued to claim that the hotel’s trademark and its tagline, “Sleep With a Local,” are trademarks that belong to Moskovits. The trustee has refuted these claims, however. That dispute didn't prevent Quadrum, which also owns three Arlo-branded hotels in Manhattan and one in Miami, from taking ownership of the property.
The Williamsburg might be the most dramatic hotel bankruptcy in New York, but it is far from the only case after the oversupplied market was hit with the pandemic. Last month, the Moon Hotel filed for Chapter 11 bankruptcy protection. Hospitality company Urban Commons filed for bankruptcy on its Battery Park City hotel, which had recently carried the Ritz-Carlton flag, last November.
In December 2020, Brooklyn’s famed Tillary Hotel also filed for bankruptcy as its owners worked to restructure millions in debt. Earlier this year, a string of Manhattan hotels sold for well below their pre-pandemic valuations, including the Times Square Sheraton. In January, the William Vale Hotel in Brooklyn was put into bankruptcy, after two years of disputes between joint owners.
