That’s how the unsecured creditors of the bankrupt Brooklyn Mirage nightclub might feel. The group withdrew its support for a bankruptcy plan that would have sold the site to Axar Capital Management LLC after learning the debt fund had struck a deal with a third party. The withdrawal was first reported by Bloomberg Law.
The unsecured creditors appear to have first heard about the deal in the pages of BKMAG reported on New Year’s Day, Axar expected to close a deal with global nightlife brand Pacha and its parent company FIVE to sell the Mirage and turn it into Pacha New York. BKMAG attributed the information to an anonymous industry source.
The creditors’ reversal is the latest twist in a story that finally seemed to be coming to an end. The popular Brooklyn Mirage venue, owned by the Avant Gardner company, underwent an extensive renovation in 2024. It sold one season of tickets for the following year and then canceled every show. The debacle finally ended when Avant Gardner’s parent company filed for bankruptcy last August, reporting $153.3 million in funded debt obligations.
An Axar affiliate received court approval in October to buy the Mirage stage and other assets from Avant Gardner in a $110 million credit offer, according to Bloomberg Law. Creditors would receive a payout if Axar could reach a certain monetary threshold.
In the meantime, Axar is said to have negotiated the deal with Pacha’s parent in the dark, out of the sight of creditors and the court.
After learning of the plans in the news, the creditors approached Axar’s counsel, who reportedly said the reports were incorrect, although discussions were reportedly underway. Then, on January 12, the creditors’ lawyer was told that the deal was virtually complete.
The creditors will not sign any plan that enables the “deception that Axar has attempted,” they wrote to the court. The deal “destroys the value” of parts of the plan, and Axar has not allowed the terms of the deal to be shared with the Delaware bankruptcy court or with the Mirage parent’s board of directors.
The affiliate’s deal with Pacha and parent company FIVE includes a purchase option that, if exercised, would wipe out a potential payout to unsecured creditors. Creditors include vendors and artists who worked with the club.
Axar has asked the court to determine that the creditors are unreasonably withholding their support. Axar is continuing the demolition and reconstruction of the Mirage, but needs a partner to finance the process, as well as $2 million in monthly costs for the closed phases.
The creditors can’t turn around and challenge a plan they once supported just because their assumption that they would get a payout turned out to be false, Axar argued in court.
“[N]“One of the parties submitted a proposal valuing the business higher than the offer made by the site management company,” the company wrote. “This is the unfortunate reality that all parties have to live with.”
Axar did not immediately respond to a request for comment.
The Avant Gardner complex with the Mirage was one of the largest clubs in New York at 80,000 square feet. The Mirage opened in East Williamsburg in 2017 and became a popular electronic music venue despite battles with the state liquor licensing authority and community board.
In 2024, the company brought in new CEO Josh Wyatt to lead a revamp of the Mirage stage. The club closed its doors due to a major renovation. But just before it was set to open a summer of shows, the city’s buildings department revoked the permit.
Although Mirage owners said the venue was ready for the show, the building’s commissioner told Brooklyn Paper that the renovation was “flammable” and “illegal.” As shows were canceled, 90,000 ticket holders were left at least temporarily in the lurch. Wyatt was fired in May 2025 and three months later Avant Gardner filed for bankruptcy.
A confirmation hearing for the bankruptcy plan is currently scheduled for February 12.
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