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Noisey

Verboten Reopens After Filing for Chapter 11 Bankruptcy

The Brooklyn club will reopen in time for Matthew Dear's birthday this weekend while it finds a way to restructure its ailing finances.

by Michelle Lhooq and Anna Codrea-Rado
Apr 1 2016, 6:55pm

Verboten's owner, Jen Schiffer reopening the club. Photo by Jesse Weiss

Verboten, the New York nightclub that was seized by New York state officials on Wednesday evening (March 30) for owing over $360,000 in taxes, reopened its doors today after filing for bankruptcy.

According to court documents seen by THUMP, Verboten's owners, Jen Schiffer and John Perez, filed for voluntary chapter 11 bankruptcy in Brooklyn Federal Court on Thursday evening. The move means Schiffer and Perez will be able keep the club open for the time being, as Chapter 11 bankruptcy allows a business to remain operational while its debtors look for a way to restructure ailing finances.

"Chapter 11 allows us to protect and consolidate our assets so we can operate this club with good partners, have successful events, bring in patrons, and move forward without being tortured, harassed and bled dry by a small number of our investors," Schiffer told THUMP over the phone this afternoon. "We have every intention to keep working with the state."

Verboten was seized by the New York Department of Taxation and Finance on Wednesday night for owing $360,378.05 in sales tax. After seizing the property, the tax department told THUMP it was working with Verboten's owners to "work out a way to return them the keys so they can reopen the business."

Schiffer said the club's seizure on Wednesday was unexpected. "We have been having ongoing negotiations regarding a payment plan with the state. To our surprise, the conversation ended this way," she said.

Asked what happened on the day the club was seized, Schiffer confirmed that state officials came after business hours, seized the business and changed the locks. "[Officials] treated me like a nightlife gangster. If anyone in New York wants to hear the full story [of what happened that night], come sit next to me at the club this weekend and I'll tell it to you," she offered.

In January, THUMP reported the club is facing accusations of fraud and financial mismanagement by employees and investors. A lawsuit has since been filed by the investors alleging labor rights infringements on the part of Verboten's management.

Verboten resident and Ghostly International co-founder Matthew Dear is slated to play a birthday set tomorrow night at the club. Schiffer confirmed that the event will be happening at the club as planned. "All programming going forward is scheduled, and we've confirmed shows well into the future," she said.

Schiffer is confident that Verboten will keep moving forward. "The club is my baby," she continued. "I invested my life savings and worked for ten years to get it open. [Reopening] it open today and being able to throw Matthew Dear's birthday tomorrow is amazing. It's been a fight and it feels amazing."