Statler group set to make deposit
Prospective buyers get another extension
The prospective buyers of the historic Statler Towers in downtown Buffalo have a little more time to secure their purchase, and they claim to have new investors to help.
The group called New Buffalo Statler Redevelopment is making a $261,000 deposit to keep alive its plans to buy the property, its attorney said at a hearing Monday in Bankruptcy Court.
The group’s attorney, William Savino, said the money had been wired to an unidentified escrow agent appointed by the court. Plans call for the money to be released to the court trustee, Morris Horwitz, by 5 p. m. Tuesday.
Completing the purchase of the giant hotel overlooking Niagara Square has become a financial soap opera. U. S. Bankruptcy Court Judge Carl L. Bucki has twice granted extensions to New Buffalo Statler Redevelopment, which has until Nov. 30 to complete the purchase.
One of the conditions of the second extension was for the group to make a $261,000 nonrefundable deposit to Horwitz. The funds were to be credited toward the $1.3 million purchase price established at an August auction.
But Horwitz earlier this month learned of a stop-payment order on the check that was underwritten by a Connecticut investment group. While Horwitz warned New Buffalo Statler Redevelopment that its bid was in default under terms of Bucki’s order, Horwitz has given the group additional time to replace the payment.
Savino would not identify the source of the new $261,000 payment. He has said new investors have entered the picture but that the original principals of New Buffalo Statler Redevelopment, William Koessler, Richard Sterben and Thomas Zawadzki, remain involved.
As for the delay in depositing the funds, Savino said: “There are conditions to the release of the money that need to be satisfied outside of Buffalo.” He declined to specify those conditions but described them as “routine items” not connected to the court proceedings.
Garry Graber, an attorney for Horwitz, said of the planned new payment: “We believe that substantial efforts have been made to find the money and that the parties have succeeded in finding the money.”
The hearing Monday was to consider a motion to terminate the sale made by Raymond Fink, an attorney for Mohmoud al-Issa, who claims to have a $4.5 million mortgage on the Statler.
Fink was seeking to have New Buffalo Statler Redevelopment’s bid terminated over failing to meet a condition of the extension and to have the property put up for sale again.
Bucki adjourned Monday’s hearing until Wednesday morning to see if the $261,000 payment is made by the close of business Tuesday.
Fink said more evidence ought to be provided that New Buffalo Statler Redevelopment is capable of closing the deal, such as who is funding it and who is running the venture. As at recent hearings, Fink called into question the group’s ability to complete the purchase.
“What we have is a process that has been turned upside down on its ear because the purchasers don’t have the money to close,” Fink said.
Graber said the trustee, Horwitz, isn’t simply waiting to see if the group succeeds in closing the deal. He has also been investigating what would be involved in remarketing the building for sale or mothballing it, Graber said.
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