Warwick Yard Sports Village operator files for bankruptcy

| 10 Aug 2017 | 11:45

The operator of the Warwick Yard Sports Village has filed for Chapter 11 bankruptcy protection after a seven-month legal battle between two managing partners.
The petition was filed June 28 in U.S. Bankruptcy Court for the Southern District of New York by managing member Mark Goldstein, in which Goldstein claims another managing member did not act in the best interests of the company. The two members listed in the petition are Goldstein and Tony Abbatine.
“One of its members was responsible for an unexplained shortfall on its books and records,” the petition reads, “and had entered into a 99-year lease and other contracts against the best interests of the debtor and without complete disclosure.”
The company, The Warwick Yard LLC, bought the 36-acre parcel, where the former Mid-Orange Correctional Facility used to be, in 2014. It has since transformed the property into a sports training complex featuring outdoor and indoor athletic fields and dormitories. The Warwick Yard LLC bought the property for about $1.7 million from the Warwick Valley Local Development Corp., but after the improvements, the petition now puts the value at about $5 million.
The Yard was part of the redevelopment corporation’s plan to transform the former prison site into a combination of private and public entities and parkland.
Records filed on July 21 list the major creditors owed money from The Yard, some of which are disputed, totaling about $4.6 million. Three of the creditors are Goldstein, Abbatine and DEMS Partners LLC, a company Goldstein is a managing member of and is listed as the largest creditor, owing a disputed $1.9 million.
Without these three creditors, the company owes about $2.5 million to 11 other creditors, many of which are contractors, excavators and developers. According to the list, Arnold M. Schwartz of Huntington Station loaned a disputed $1.45 million, the second largest amount after DEMS Partners LLC.
Records show that The Yard has an eight-year lease with the Warwick Valley Development Corporation for a 5,000-square-foot building and a 97-year lease with Warwick Powerhouse Inc. for the 60,000-square-foot building.
Brian Condon, Goldstein’s attorney, did not respond to multiple calls and emails for comment by press time.
Abbatine also did not respond to calls for comment by press time.
Legal battleThe Chapter 11 filing comes after a seven-month legal dispute between Goldstein and Abbatine over the management of the company. In court records dating back to October 2016, Goldstein accuses Abbatine of “fraud, theft, embezzlement or other acts of self-dealing that are adverse to the interests of the company, including paying himself $95,000 of salary before taxes, contractors and liabilities of the business were paid.”
On March 13, 2017, Goldstein claimed that $292,827.05 was owed to contractors and $98,010.12 was owed in property taxes. Goldstein also claims that a buyer wanted to buy the business for $4.4 million, but backed out after not receiving accurate accounting records from Abbatine.
Abbatine denied all of these claims, according to court records, and filed counterclaims against Goldstein, including disparaging Abbatine’s reputation “by spreading false information about his actions and capabilities to present and potential business relations in an attempt to negatively influence their views and future business dealings.”
On July 10, 2017, the lawsuits were severed due to the Chapter 11 bankruptcy filing.
Abbatine also owns The Rock Sports Park in the Town of Chester, a baseball and softball training center part of the national Frozen Ropes franchise. The facility consists of three outdoor fields and a 15,000-square-foot building with indoor turf fields and concessions.
Plans to move the Frozen Ropes program to The Yard stalled after The Town of Chester’s plans to buy the facility were thwarted when the town voted against the proposal in a November referendum.
As far as operations during the Chapter 11 proceedings, a spokesperson for The Yard said it will be “business as usual.” They also issued the following statement:
“Business is good. We have our fall and winter schedules being released soon. We’re excited about the upcoming season as we’re reorganizing and bringing in new partners. And just to be clear, The Yard is not Frozen Ropes. Mr. Abbatine is one of five partners at The Yard.”