Negotiations to resolve a long running financial dispute between Lincoln Square Synagogue, a Modern Orthodox fixture of the Upper West Side, and Joey Allaham, well-known kosher restaurateur and owner of The Prime Grill, have stalled, according to several people involved with the talks. At issue were unpaid rental fees by Allaham, who was the sole caterer for functions at the synagogue.
Rabbi Menachem Genack, CEO of the Orthodox Union’s kosher division, said he brought together the two parties late last year to try to resolve the impasse that resulted after Rabbi Hershel Schachter, a well-known Orthodox authority who served as arbiter, ruled that Allaham pay Lincoln Square $1.4 million in addition to attorneys’ fees and other costs incurred in the proceeding.
Rabbi Genack previously told The Jewish Week it would withdraw its certification of Allaham’s operations if he refused to comply with Rabbi Schachter’s ruling.
Allaham has yet to pay the sum, but he said an agreement was reached during the negotiations that had Rabbi Schachter’s “blessing.” Allaham said that Lincoln Square officials “never got back to us” and that the offer still holds.
Sources say the tentative settlement called for Allaham to pay the synagogue $1 million over a five-year period — $200,000 a year — but that Lincoln Square officials backed away from the arrangement after losing trust in the restaurateur.
A member of Lincoln Square familiar with the discussions told The Jewish Week: “The possible settlement, which the synagogue never agreed to, depended on Prime Grill’s good faith in making multi-year payments and the success of Prime Grill’s Passover programs being able to support the payments. The talks died because the synagogue believes Prime is hiding assets.”
According to a Lincoln Square representative, Allaham’s bank records indicated that he has been moving “hundreds of thousands of dollars” out of his accounts rapidly in recent months.
(Lincoln Square has access to Prime Grill’s financial information because the court order against Allaham entitles the synagogue to an asset search). The Lincoln Square representatives requested to remain off the record as negotiations are still ongoing.
In a separate incident, New York State tax officials visited three of Allaham’s restaurants early on the morning of Feb. 16, seeking sales tax information. Benjamin Brafman, an attorney representing Allaham, wrote in a statement to The Jewish Week: “I am confident that this matter will be resolved with a ‘civil’ resolution and the payment of certain sales tax that may have been inadvertently omitted.” He said he did not expect criminal charges to be filed.
Security officials at the SONY building, which houses Allaham’s flagship Prime Grill restaurant, confirmed that the visit took place. Investigators seized all the computers and point of sale (POS) systems from the restaurant, according to a source in contact with employees at the restaurant.
Prime at the Bentley, Allaham’s upscale kosher ‘pop-up’ restaurant on East 62nd, and Prime Butcher and Bakery on the Upper East Side, were visited as part of the investigation, according to sources.
Prime Grill’s move to the Sony building was the restaurant’s third relocation since launching in 2000. Allaham was involved in a lawsuit over Prime Grill leaving the East 49th Street location, resulting in a settlement that alleged he had owed more than $850,000 in unpaid rent. Prime Grill was evicted from the second location, on West 56th Street, in August 2015. Prime KO (which became Prime West), was evicted from its West 85th Street location in April 2016.
Last November, an arbitrator in a legal case involving Allaham’s Passover program in Puerto Rico in 2015 ruled in his favor over the Vieques Hotel Partners, owners of the W Retreat and Spa.
According to Allaham’s complaint, the hotel staff carried out “numerous repugnant and indefensible acts of hostility, bias, malice, discrimination, anti-Semitism … vandalism and theft” towards his staff and guests.
The W Retreat and Spa did not respond to request for comment.
Gary Rosenblatt and Chaim Levin contributed to this report.