The former owner of New York City’s now-defunct Chelsea Wine Shop demanded steep discounts on exorbitantly priced vintage French wines as part of a bizarre and ill-fated business sale deal, The Washington Post has learned.
Police said Michael Gancarz was arrested last month on suspicion of theft and trespass after he showed up at his former upscale store at 60 Ninth Avenue and attempted to walk away with armfuls of merchandise, The Washington Post reported.
Sources said Gancalz was unhappy with the progress of a deal to sell the store, which spectacularly fell through, leading to the store’s closure after 25 years and trouble with the police.
A copy of the purchase agreement obtained by The Post lists several unusual clauses. In addition to helping Gancalz secure a $1 million, five-year, interest-free loan,, The buyer of the business also demanded that Gancals and his wife, Amelia, be given “the right to purchase the Democratic Republic of Congo at cost price.”
According to sources, “DRC” apparently refers to Domaine Romanée-Conti, a winery in Burgundy, France, whose wines are considered by many to be the best in the world, with bottles typically retailing for more than $2,000 a bottle.
It is not clear whether the Gancalzes’ plan was to drink the premium liquor or to resell it, but industry sources said the contract clause seemed impossible to implement because wine stores are only granted a small allocation of DRC if they’re lucky, and the profitability and prestige of their business depends on it.
“If I were the new owner, I would want to keep the allocation and sell it at a higher price,” said a wine expert who asked not to be named and was not involved in the deal. “In essence, Michael and Amelia are trying to get the store to sell their most profitable allocation at cost price. It’s crazy.”
It’s the latest development in a saga that has dragged on since the Gancalzes got into trouble last year for moving their wine storage business into the basement of a TGI Fridays near Times Square without informing customers.
Customers complained they were being denied access to their prized vintages, including other Burgundy wines such as the 2011 Coche-Dury Meursault, which sells for $1,200 a bottle, and Faiveley-Batard-Montrachet, which sells for $490 a bottle, according to inventory lists seen by The Washington Post.
Some feared the worst after the high-profile collapse of Manhattan wine store Shelley Lehmann, which failed to return hundreds of thousands of dollars’ worth of expensive liquor to customers, a case that’s now under investigation by the FBI.
“I’ve been a customer for 18 years and now they’ve stopped contacting me,” one panicked Chelsea Wine Storage customer posted on a wine forum last fall.
Another wrote: “I am extremely concerned about my collection as they have not answered my emails or calls… Some of my most precious bottles have somehow stopped showing up in stock.”
Amid the turmoil, hospitality entrepreneur Babek “Bobby” Khorami agreed to buy Chelsea Wines from Gancals for $50,000 up front, helped arrange a $1 million loan and agreed to bizarre Democratic Republic of Congo clauses.
A deal to sell the troubled business was signed in February, but by last month things had clearly deteriorated.
Gancalz showed up at the store across from the upscale Chelsea Market mall on June 15. Khorami called police shortly thereafter, and Gancalz was arrested on suspicion of theft, trespass and petty theft, police said.
According to the police report, Gancarz allegedly removed “furniture, wine, tables, glasses, poles and other items” from the store.
Khorami said Gancarz arrived at the building in two pickup trucks.
“I believe other local residents also called the police,” Khorami told the Post.
On July 3, Gancarz appeared at his second arraignment hearing in Manhattan Criminal Court, captured on video by a Washington Post photographer, dressed neatly in a suit and tie. He dodged all questions about the case.
He has yet to plead in the case.
Sources said Mr Gancalz and Mr Khorami struck a deal in February after Mr Gancalz, who ran the shop with his wife Amelia, fell behind on rent payments.
It is unclear what caused the breakdown in the relationship, but one source claims that Mr Khorami did not pay promised amounts and, when Mr Gancarz showed up at the store last month, was trying to protect his stock by moving it to a wine storage facility.
Khorami claims he made the initial $50,000 payment.
Gancals did not respond to a request for comment.
Meanwhile, Chelsea Wine Store landlord Michael Sher claimed that despite his aggressive action to have Gancarz arrested, Khorami had not met his obligations as a tenant.
According to court documents, on May 15, Civil Court Judge Lena Malik authorized the issuance of an “eviction warrant.”
“Bobby never applied to assume the lease or paid a dollar of rent,” Shah told the Post. “His lawyer never showed up in court. [at the eviction hearing] Bobby said he’d pay the rent.”
Shah said he has begun eviction proceedings against Khorami.
Khorami’s lawyer, Louis Chisari, did not respond to repeated calls and emails from The Washington Post.
Khorami declined to comment on whether he is leasing the space.
He claimed he was in negotiations to purchase the building from Mr Shah.
“Ultimately, we will come to an agreement with him,” Koalami told the Post.
According to authorities, the establishment’s liquor license was placed on “custody” by the Gancalzes with the New York State Liquor Control Board on June 4. The establishment cannot operate while its license is invalid, according to the SLA.
Still, Corami appears to be preparing to reopen both his new venue and the wine bar the Gancalzes ran downstairs, where a sign in the window reads, “Corvino Opening Soon.”
The new brand is A bare-bones website but also Instagram account.
Khorami himself has had numerous legal problems, having been plagued for years by bankruptcy and lawsuits from multiple investors who claim they were deceived, according to court documents.
“There is a lot of anger towards Bobby from people in the hospitality industry,” said a source who knows Mr Khorami.
At the time of the Chelsea Wine deal, Korami was facing multiple lawsuits from investors after restaurants he had opened in Delray, Florida, and Rye, New York, went bankrupt.
He eventually filed for Chapter 7 bankruptcy in 2021 and emerged from bankruptcy last year. According to court records.
“I’ve been in this business for 20 years, and sometimes you just can’t satisfy people,” Khorami told The Post about the lawsuit.
“But we run a clean business.”
Khorami also claimed he had put together a team of investors for failed businesses and was working with others on the 60 Ninth Avenue venture.
New York restaurateur Robert Nocerino told The Washington Post he was introduced to Korami through a college friend in late 2021. Nocerino said Korami was a partner in Meso, a popular Mediterranean restaurant in Rye, New York, and was looking to open a branch in Delray, Florida.
“He flew me out to Florida,” Nocerino said, “and I was very happy with the investment.”
The deal fell apart quickly: After Nocerino invested $270,000 in the Del Rey branch, the chain filed for bankruptcy in June 2022, just eight months after it opened.
“Bobby put me in a terrible situation. I lost everything I had,” Nocerino said.
Another investor in the Delray branch, Clark Golestani, is suing Khorami and other executives of the restaurant, seeking return of the $250,000 he put into the Delray eatery.
The case is currently pending, but was recently postponed by the court after two of Khorami’s business partners filed for personal bankruptcy.
Khorami’s business partners in B Conscious Hospitality, LLC, the holding company that owns the restaurants, have also filed for bankruptcy, as has the LLC.
