The dispute and its resolution were filed on the same day, raising questions about what the creditors won behind closed doors
On Sunday, February 2, Brooklyn Magazine published a detailed account of the legal chaos threatening to upend the sale of Avant Gardner and its flagship venue, the Brooklyn Mirage, to the parent company of global nightlife brand Pacha. Creditors had accused Axar Capital Management of “trickery.” The deal, they said, had been “negotiated in secret.” The bankruptcy plan was in jeopardy.
What BKMag’s article didn’t, and couldn’t, capture was what happened on the very same day it was published.
Court records from the U.S. Bankruptcy Court for the District of Delaware show that on February 2, attorneys for Axar, the unsecured creditors’ committee, and the Avant Gardner debtors jointly filed a notice announcing an “Agreement in Principle Resolving All Chapter 11 Plan, Sale, and CVR Motion Issues.” The four-page filing, Docket No. 570 in Case No. 25-11446, was signed by counsel for all three sides — Young Conaway Stargatt & Taylor for the debtors, McDermott Will & Schulte for Axar, and Orrick Herrington & Sutcliffe alongside Morris James for the creditors’ committee.
The document states that the agreement resolves “the objections of the Committee to certain transactions disclosed to the Committee during discovery involving the Axar Parties and their counter-party which, following the closing of the Sale, will operate the business of the Purchaser.” That unnamed “counter-party” is FIVE Holdings, the Dubai-based conglomerate that owns the Pacha nightclub brand, though the company is never identified by name in the court filing.
As part of the resolution, Axar withdrew its motion asking the court to declare the creditors were “unreasonably withholding” consent to the deal’s contingent value right provisions. The creditors, in turn, withdrew their notice pulling support for the bankruptcy plan and their sealed and redacted statements, the very filings that contained the “trickery” and “cover of darkness” allegations BKMag reported on. All withdrawals were made “without prejudice,” meaning either side could reassert their positions if the final documentation falls apart.
The next morning, FIVE Holdings issued a press release announcing that Pacha New York would open at the Brooklyn Mirage site in June 2026.
“We are pleased to have achieved an agreement in principle with the Committee of Unsecured Creditors resolving all material matters related to the Chapter 11 plan and sale transaction,” said Andrew Axelrod, CEO of Axar Capital, in the release.
The timing raises an obvious question: what did the creditors get?
The original Global Settlement, approved by Judge Mary F. Walrath in October 2025, gave unsecured creditors $1.05 million upfront, $750,000 annually for three years, and a contingent value right, a mechanism allowing them to share in the upside if the venue proved financially successful after the sale. The creditors’ core allegation, first reported by Bloomberg Law on January 28 and detailed by BKMag and The Real Deal, was that Axar’s side deal with FIVE Holdings included a purchase option structured to eliminate any CVR payout.
The February 2 filing says the agreement modifies the original settlement terms, but provides no specifics. Those details are subject to “definitive documentation in form and substance reasonably acceptable to each of the Global Settlement Parties”, language that means the actual numbers haven’t been finalized, or at least haven’t been made public yet.
The definitive documents are expected to be filed ahead of a confirmation hearing, which The Real Deal reported is scheduled for February 12.
BKMag’s reporting was accurate as of the moment it was published. The creditors had, in fact, pulled their support. Axar had, in fact, been accused of concealing the FIVE Holdings deal. But the story it told, of a transaction mired in legal uncertainty, had a shelf life measured in hours. The resolution was already on the docket.
Whether the creditors won meaningful concessions or simply accepted reality remains the central unanswered question. The court filings that answer it haven’t been written yet.
The six debtor entities in the bankruptcy — AGDP Holding Inc., Avant Gardner LLC, AG Management Pool LLC, EZ Festivals LLC, Made Event LLC, and Reynard Productions LLC are jointly administered under Case No. 25-11446 before Judge Walrath in the District of Delaware. Court filings are available through PACER and the claims agent portal at veritaglobal.net/AGDP.
