On New Year’s Day, Brooklyn Magazine published an exclusive on the near-certain sale of the electronic music mega-venue Brooklyn Mirage to the world-famous entertainment brand PACHA. The story seemed to describe a straightforward venue restructuring: a series of safety issues and expensive renovations, bankruptcy in August 2025, and then a new private equity-backed deal to rebrand under a bigger name.
NYS Music was just one of the publications to cover the story last month, led by reporting from Brooklyn Magazine. Some outlets anticipated that the quality and authenticity of the venue would drop following a private equity reorganization, pointing to the Dubai-based group that recently acquired the PACHA brand, Five Holdings, while others welcomed what would be the first American installation of the Pacha brand in recent years.
Pacha’s Ibiza club is considered legendary in the history of electronic music, and though its website claims its mission is to bring “the essence of Ibiza to the world,” its recent movement into the mainstream has meant eye-watering prices and growing crowds.
However, a new article published by the independent electronic music platform Unmixed reveals a series of complications in the sale that appear to have ground progress to a halt.
According to new court documents, the committee behind the sale of the Mirage has accused Axar Capital, the firm behind the PACHA rebrand, of betraying the initial terms of the nearly $110 million sale through a “secret” side deal that would cut out creditors of the now-bankrupt Mirage from any future profits tied to the venue.
The sale terms that Axar and the committee had formerly called “a very good deal” were based on a contingent value right, or CVR, that would ensure future profits were shared among employees and creditors.
In fact, the Jan. 1 Brooklyn Magazine exclusive reporting on the Pacha sale was breaking news not only to readers, but to the committee itself. Based only on information from an “industry source” who spoke on the condition of anonymity, the article announced the sale to Five Holdings, the Dubai-based fund that would bring the Pacha brand to New York City for the first time since 2016.
The sale committee has officially withdrawn its support for the deal in the legal proceedings.
“With disappointment,” the filing contesting the continuance of the sale reads, “the Committee withdraws its support for confirmation of the Plan because recent events render the Plan and the consideration provided to general unsecured creditors thereunder inconsistent with the Global Settlement.”
The filing not only contends that the “secret” deal would divert value away from unsecured institutional creditors, but also from “former employees, including temp and hourly workers,” according to the Unmixed piece. These workers were laid off without severance or benefits following the bankruptcy and are now contesting Axar’s alleged “trickery” as creditors in bankruptcy court, a process they hope will allow them to claim unpaid benefits.
While the conversion of the Mirage into a New York City Pacha has not been formally stopped, progress has been stalled until the parties can reach an agreement on the dispute, with the courts set to play a central role.
Unmixed’s reporting suggests the battle will be more technical than earlier headlines made it seem.
“The real battle won’t be over what name is slapped on an event flyer — it will be over who actually gets paid and what’s behind that process,” the article reads.
As the courts handle the dispute, the timeline for the long-awaited reopening of the more than 6,000-capacity outdoor electronic music venue remains uncertain.
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