Brooklyn Group Buying HNA Center Defaults: Requests 60 More Days To Close

Real Estate

ZVG@Palisades Center LLC Asking Bankruptcy Court For More Time

By Tina Traster

The Brooklyn group under contract to purchase the HNA Training Center in Palisades from the Chinese-owned property has defaulted on its contract and is seeking relief in the bankruptcy court to buy itself 60 additional days to find the funds to close.

ZVG@Palisades LLC, an entity affiliated with Vasco Ventures, was given one previous extension by the seller. Now the company is seeking relief after filing a Chapter 11 petition in the Eastern District of New York. ZVG@Palisades is asking the bankruptcy court to impose a 60-day extension to enable it to close the transaction.

At risk is the debtor’s $8 million deposit on the $40 million contract that was signed on April 4th.

The property, located at 234 Route 9W, includes a hotel and conference center. The property sits on a secluded tract of 106 bucolic acres.

ZVG@Palisades LLC filed for chapter 11 protection September 12. The company reports $10 million to $50 million in both assets and liabilities.

The debtor is represented by Goldberg Weprin Finkel Goldstein in New York. The case number is 19-45511. The case has been assigned to Judge Carla E. Craig.

According to a declaration attached to the petition, the parties were “working toward a closing” on Sept. 12 but one of the debtor’s cash funders unexpectedly withdrew. “The debtor did not anticipate this unfortunate turn of events and now requires additional time to close,” according to the petition.

The debtor says that the seller does not appear to be willing to extend the closing, and that it filed the case to take advantage of an additional 60 days to close pursuant to Bankruptcy Code section 108(b) which applies to real estate transactions.

The petition also states “the debtor remains committed to close and has opted to file the instant Chapter 11 petition to preserve all of its rights under the contract,” the petition states. The filing of the petition, at least for now, prevents the loss of the buyer’s deposit.

Vasco Ventures recently purchased the Hudson Valley Resort in Kerhonkson. Vasco Ventures paid HNA Group, a Chinese firm that also owns the HNA Center, $4.4 million for the downtrodden upstate hotel.

The HNA center in Palisades is a facility of conference spaces equipped with high-speed internet and state-of-the-art technology

Vasco Ventures, a south Brooklyn-based, real estate investment business buys commercial and residential real estate. Vasco Ventures, founded by Ephraim Vashovsky in 2008, describes itself as a leader in “distressed and undervalued” real estate.

Vashovsky has previously focused on buying city residential buildings to upgrade them, and then rent or sell them in a much-improved state. More recently, Vasco Ventures has shifted to larger properties, such as the 2017 acquisition of the Griffin Office Park Portfolio in Hartford, Connecticut, for a reported $5 million. That five-building, 375,000-square-foot suburban office campus sits in the Griffin Office Center, a 600-acre development in greater Hartford.

Vasco Ventures also has buildings in Indianapolis, Philadelphia, and New York.

In 2017, Vashovsky pleaded guilty to reckless endangerment in the first degree, a felony, one count; and endangering the welfare of a child, a Class A misdemeanor; in a case involving a building on East 115th street in Manhattan. Vashovsky had bought the building for $3 million with a plan to renovate and rebuild luxury apartments. A family with five children under the age of 12 were living in the building. To force them out of their $2,400 a month rent stabilized apartment, it was alleged that Vashovsky gutted the building around them, cut off water and heat; and, according to the Manhattan district attorney, orchestrated a campaign of harassment. Vashovsky was sentenced to twenty days community service and forfeiture of $350,000.