Brooklyn Mirage Set to Clear Bankruptcy Court, Pacha New York to Open in June

By Scott Enman

Editor’s note: A previous version of this story incorrectly stated that FIVE Holdings had completed its purchase of Brooklyn Mirage, and its parent company Avant Gardner had finished its bankruptcy proceedings. It has been updated to reflect clarifying information from a Pacha New York rep on Axar and FIVE’s partnership in the agreement. 

Pacha New York will officially open at the (former) Brooklyn Mirage location this June, according to FIVE Holdings, the Dubai-based holding company for the global nightlife brand.

As Brooklyn Magazine exclusively reported on January 1, Pacha’s parent company was expected to enter into a deal with Axar Capital Management to take over Avant Gardner and turn its flagship venue into Pacha New York. That deal was officially announced in a press release on Tuesday morning. “For all its global pull, the heartbeat of Pacha New York remains unmistakably Brooklyn,” the release says, adding that FIVE Holdings has entered into “a long-term agreement assuming full operational management” of the Brooklyn Mirage and its sister venue The Great Hall. Ownership, at least for now, will be retained by Axar, a rep for FIVE told BKMAG.

The news caps a whirlwind of a week for Axar Management, Avant Gardner, and FIVE Holdings. Just days ago, a group of unsecured creditors for the Brooklyn Mirage pulled its support for a bankruptcy agreement after it learned in BKMAG’s report that Axar had brokered a deal “under the cover of darkness” with FIVE Holdings. On Monday, the two groups reached an agreement to put all of that in the past, according to court documents.

The details of the new agreement were not specified in the filing, but the committee of creditors agreed to withdraw its rescission, which will allow the bankruptcy plan to progress. “With these matters now resolved, the transition to FIVE and Pacha can move forward in earnest,” said Andrew Axelrod, CEO and CIO of Axar. “We are thrilled to partner with FIVE and Pacha to bring a world-class operator to Brooklyn.”

The original deal between Axar and FIVE included a “purchase option,” according to court documents submitted by Axar, that “if exercised,” may have resulted “in there being no payment made on” a contingent value right, or CVR. The CVR allows for creditors to recoup some of their money if Avant Gardner was sold and proved to be “wildly successful,” a term used in separate court documents. This was a major point of contention to the creditors who said, more bluntly in their own court filings, that the original deal with FIVE was “simply structured to avoid payment on the CVR.” It’s unclear how Axar and FIVE have amended their deal to appease the committee of creditors, or if that purchase option has been altered (or even still exists). A confirmation hearing for Mirage’s bankruptcy plan is scheduled for February 12.

Axar, a longtime lender of Avant Gardner, acquired the complex at a bargain of $110 million, following a Chapter 11 bankruptcy filing in August. Axelrod called it “a challenging period” for the East Williamsburg club.

The venue’s season is set to open in June—assuming the demolition of Mirage and the subsequent rebuild go smoothly—and run through October, similar to Mirage’s former schedule. Demolition of the Mirage was approved last month and was set to start on Monday, February 2, according to City and Community Board records. A letter submitted to Community Board 1 says the full demolition of its current three-story structure is expected to be completed in April or May, with a cost of $1.5 million (plus a $1,271.40 filing fee).

Pacha promises to bring in international headliners alongside local talent. It also intends to upgrade The Great Hall and continue to operate year-round as a venue.

The agreement is “a defining moment in our global journey,” says FIVE Holdings owner Kabir Mulchandani. “For us, New York is not simply a new chapter—it is a statement of intent about the scale of our aspirations and the cultural impact we are here to create,” Mulchandani added. The original Pacha nightclub, an iconic venue in Ibiza, previously attempted to create a footprint in New York City back in 2005. Pacha NYC, the North American branch of the brand, operated for 10 years inside a massive building in Hell’s Kitchen before shuttering in January 2016.