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Welcome back!

We have a very exciting piece and a pretty topical one if you’ve ever frequented the Brooklyn Mirage. As you may have seen, Avant Gardner, the parent company of the famous Brooklyn Mirage recently filed for chapter 11 bankruptcy.

One quick reminder - we are running job placements for an entry level Credit Analyst, an IR Professional, and some LA-based Private Credit roles on my job board, Buyside Hub.

Let’s dive right into it.

Introduction

Avant Gardner, the parent company behind Brooklyn’s famous Brooklyn Mirage club, a NYC-based club with 8,000+ of capacity, shocked the nightlife industry by filing for Chapter 11 bankruptcy in August 2025. Once hailed as New York City’s premier electronic music venue complex, Avant Gardner expanded rapidly in recent years, even acquiring the Electric Zoo festival in 2022. But a confluence of operational overreach, costly real estate ownership, and ill-timed setbacks pushed the company into a financial crisis. Court filings show Avant Gardner had amassed over $155 million in secured debt by mid-2025[1], alongside unpaid taxes and vendor bills. This report will narratively analyze Avant Gardner’s bankruptcy filings and discuss why owning venue real estate and running daily events can be perilous in a declining nightlife market. We’ll also examine how other operators like Canada’s INK Entertainment and Liberty Entertainment Group avoid these pitfalls by separating their operations from property ownership, adopting an OpCo/PropCo model. Finally, we consider likely recoveries for creditors and lessons for the industry.

The Pitfalls of Owning Property and Operating Nightly in Nightlife

Nightlife and live music venues are inherently volatile businesses, and Avant Gardner’s experience underscores the downsides of being open every day and owning the “dirt” (land/property) under a club. Unlike a bar or restaurant with steady daily patrons, mega-clubs rely on periodic high-demand events. Opening nearly every night can lead to oversaturation, higher staffing costs, and regulatory scrutiny without proportionate revenue. Additionally, Avant Gardner felt inclined to make significant renovations to the Brooklyn Mirage. In New York, Brooklyn Mirage’s constant parties drew noise complaints and regulatory crackdowns in its early years[2]. For example, fire department shutdowns and community board run-ins plagued the venue’s first few seasons[3].

Ownership of the venue’s real estate further compounded risk. Owning property ties up capital and saddles the operator with fixed costs – mortgages, taxes, insurance, maintenance – even when the venue isn’t generating income. If business falters or, as in Avant Gardner’s case, the venue is forced closed, those property costs become a crushing burden. By mid-2025, Avant Gardner owed approximately $6.5 million in unpaid taxes[4] on its venue, a liability that accrued while revenue stalled. The company’s massive new stage structure at Brooklyn Mirage, which it treated as a “temporary” installation to expedite permits, ended up being classified as a permanent building by city officials, leading to permit revocation[5]. Yet Avant Gardner was financially on the hook for the entire construction investment regardless of its operational status. TLDR - owning the venue meant all the downside of delays and regulatory issues fell on the company.

By contrast, many successful hospitality groups lease their spaces or separate real estate into a different entity. This OpCo/PropCo split (operating company vs. property company) is a common strategy to mitigate risk. OpCo/PropCo arrangements keep financing and credit issues independent for each entity, and are generally associated with an intelligent business operations team. 

The operating company can focus on running profitable events, while the property company (often backed by real estate investors or landlords) handles ownership costs and risks. If a venue underperforms, the operator can exit the lease or restructure without having to also liquidate a building. As we’ll discuss later, Canadian night-life operators like INK Entertainment (owners of clubs like Rebel and Cabana in Toronto) and Liberty Entertainment Group (which runs venues like Liberty Grand, which our research analyst has personally dj`d at, and Casa Loma) have largely eschewed owning their real estate, opting for leases or management contracts. This asset-light approach insulates them from property-related financial ruin and provides flexibility in the face of nightlife’s secular decline. Avant Gardner, by contrast, doubled down on owning and constantly using its space – a strategy that backfired once headwinds hit.

Brooklyn Mirage’s Road to Bankruptcy

Avant Gardner’s financial unraveling in 2025 can be traced to a perfect storm of renovation delays, permit problems, a festival fiasco, and mounting debt. In court filings, CEO Gary Richards explained that losing the Brooklyn Mirage for the entire 2025 summer season was “catastrophic for the Company’s operations and liquidity”[7]. The Brooklyn Mirage, an open-air 6,000+ capacity arena and Avant Gardner’s crown jewel, had been scheduled to reopen May 1, 2025 after extensive off-season renovations. 

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