http://www.buffalonews.com/258/story/842474.html
Statler deal grinds forward with deposit payment
By Matt Glynn
News Business Reporter
October 28, 2009, 2:30 PM
The prospective purchasers of the Statler Towers today provided a $261,000 payment to the trustee in the Statler bankruptcy case, erasing a problem that had threatened to derail the group's plan to acquire the property.
William Savino, an attorney for New Buffalo Statler Redevelopment, handed over the check at a court hearing.
"This is great news for Buffalo," Savino said afterward. "People wouldn't put money at risk if they weren't confident" about completing the deal.
Garry Graber, an attorney for the Statler trustee, Morris Horwitz, said the group has now paid about $500,000 of the $1.3 million purchase price, which was established when the group submitted the winning bid at an August auction. The rest of the money is due Nov. 30.
The amount the group has invested in the Statler thus far is even larger, about $750,000, when counting other expenses the group has paid, such as the Statler's operating expenses, Graber said.
"We're happy it worked out today," Graber said. "It makes it much more likely the deal will close, in my opinion."
But as with so many developments in the Statler case, the payment did not come about smoothly.
The check was supposed to be delivered to Horwitz by 5 p.m. Tuesday, but that didn't happen. Savino cited factors unrelated to the bankruptcy case that delayed the release of the money to the trustee.
Savino would not identify the source of the $261,000. It was sent to attorney Ralph Lorigo, whom the unidentified investor chose as an escrow agent, until an agreement to hand over the money was finalized. The start of today's hearing was delayed for more than an hour.
New Buffalo Statler Redevelopment also agreed to the trustee's insistence on adding $30,000 to the Statler purchase price, to cover expenses incurred that stemmed from delays in completing the deal.
Graber initially called for tacking on $50,000 to the purchase price, and told U.S. Bankruptcy Court Judge Carl L. Bucki that the trustee would not accept the $261,000 check without a commitment to that additional amount.
Savino balked at the $50,000 figure. But while the hearing was still under way, the prospective purchasers and trustee compromised on the $30,000 figure.
The $261,000 payment was one condition of a second extension New Buffalo Statler Redevelopment was given to close the deal.
But a Connecticut-based investment group that underwrote the initial $261,000 check stopped payment on it earlier this month, throwing the process into doubt.
Horwitz had warned New Buffalo Statler Redevelopment that it could be found in default if the money was not replaced, which prompted the payment that was made today.
Bucki at the end of today's hearing noted the conditions the prospective buyers must still meet, including the Nov. 30 closing date.
"I hope that last condition comes true, but I've been surprised before," Bucki said.
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