Buffalo, NY (Business First of Buffalo) -- The prospective buyers of the historic Statler Towers building have until late Tuesday afternoon to produce a promised $261,000 good-faith payment.
If they fail to do so, the group risks being declared in default and, potentially, losing their chance to acquire the downtown Buffalo landmark.
U.S. Bankruptcy Court Judge Carl Bucki deferred making a ruling on whether New Buffalo Statler Redevelopment LLC, the prospective buyers, is in default on its $1.3 million bid for the 18-story building, pending the delayed arrival of the payment that was promised one month ago. The $261,000 was initially to be made by the Oct. 2 deadline, but suddenly on Oct. 16, the Connecticut investor who supplied the check stopped payment on the transaction. That set into a motion a new series of arguments and challenges before Bucki, primarily brought forth by the attorney representing Mohomoud al Issa, who alleges he has a valid $4.5 million mortgage on the building his son, Bashar Issa, bought in 2006.
“I think we are all dancing with ghosts,” said Raymond Fink, al Issa’s attorney. “This deal has been breached in more respects than fulfilled.”
However, William Savino, New Buffalo’s attorney, countered the money has already been wired to a local, unnamed attorney who is serving as an escrow agent. The money will be released Tuesday afternoon, pending the outcome of other deals taking place outside of the region. The funds are coming from an out-of-town investor who Savino has also declined to identify.
“If the money is not released by Tuesday, then the bid could be in default and the successful bid should be disregarded,” Savino said.
Bucki deferred his ruling until Wednesday morning to see if the good-faith payment cleared.
Bucki has warned if the money is not in hand, he may follow through with the elder al Issa’s request to find New Buffalo’s bid in default.
The court-appointed trustee, Morris Horwitz and his special counsel, Garry Graber, both said they feel confident the money will be delivered and the closing process can move forward.
“I have felt all along they (New Buffalo) are being forthright with their efforts,” Horwitz said. “As it stands right now, I see no reason to pursue the default.”
Graber, did concede, that New Buffalo is “on a short string.”
“There may come a time when, if there is no money and only explanations, we may have to bring this deal to an end,” Graber said.
Graber said he and Horwitz are considering a number of options for the Statler ranging allowing New Buffalo to work towards its Nov. 30 closing date, re-auction the building or mothball the structure.
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