Group gets more time for payment on Statler

The prospective buyers of the Statler Towers will get some additional time to come up with a required $261,000 payment.

William Savino, a new attorney for New Buffalo Statler Redevelopment, said Tuesday that a new investor has just entered the picture and he expects that party will come up with the money "quickly enough to keep the court and the trustee happy."

New Buffalo Statler Redevelopment was supposed to make a $261,000 nonrefundable deposit to Morris Horwitz, the bankruptcy court-appointed trustee, as a condition of a second extension the group received to close its $1.3 million deal for the Statler by Nov. 30.

But late last week, JPMorgan Chase & Co. notified Horwitz of a stop-payment order on the check, which was underwritten by a Connecticut investment group. The money was to be applied to New Buffalo Statler Redevelopment's purchase of the Niagara Square property.

Savino alluded Tuesday to "out of town" financial support coming into the purchase effort, but he did not identify the source. "There's some other people coming in," he said.

Garry Graber, an attorney representing Horwitz, said the trustee believed allowing the additional time for making the $261,000 payment was appropriate, in light of the involvement of a new investor and the lack of alternative buyer on the horizon.

"We believe the purchasers are working hard to try to get the money," Graber said.

During the hearing, Graber acknowledged the tough situation Horwitz faced as the trustee in the Statler case. "He does not want to see the building closed and weatherized and falling down and any number of situations that could occur," he said.

He also said the prospective buyers

are current in their payments of the Statler's payroll, utilities and insurance costs, including a $34,000 payment made Friday. "These purchasers do continue to put additional skin in the game in the form of money," Graber told U. S. Bankruptcy Court Judge Carl L. Bucki.

Bucki scheduled a hearing Monday on a motion made by Raymond Fink, an attorney for Mohmoud al Issa, the father of developer Bashar Issa.

Fink asked for New Buffalo Statler Redevelopment to be declared in default and for the Statler to be put up for sale again in some form.

"My problem is I don't think the deal is ever going to close," Fink said after the hearing. Fink said he would prefer that a new sale process get started right away, rather than waiting for the Nov. 30 extension to expire.

Al Issa claims to have a $4.5 million mortgage on the property, but the validity of the mortgage is in dispute. Bashar Issa bought the Statler in 2006, but his company, BSC Development, was forced into bankruptcy in April.