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Posted on Mon, Apr 30, 2012 : 6:46 p.m.

Dream Nite Club loses liquor license as Michigan denies renewal

By Paula Gardner

A troubled downtown Ann Arbor bar at the center of multiple pending lawsuits and a bankruptcy won't be able to operate after Monday following the non-renewal of its liquor license by state officials.


The decision affecting Dream Nite Club was made Monday during a hearing of the Michigan Liquor Control Commission, said Stephen Postema, city attorney.

The move followed a city decision in March, when officials decided to ask the state not to renew the liquor license during the MLCC's annual renewal process.

That vote by City Council came after a 4.5 hour hearing in March at City Hall led by the Liquor License Review Committee and its chair, council member Tony Derezinski.

At that hearing, city officials objected to renewal of the liquor license for what they described as repeated violations of the state liquor law, including allowing fights and the improper use of weapons at the bar, which was previously known as Studio 4. It's located at 314 S. Fourth Ave.

According to a previous report: Derezinski released his statement of findings following (the March 19) hearing, referencing "a pattern of patron conduct in the neighborhood of the licensed premises which is in violation of the law and/or disturbs the peace, order and tranquility of the neighborhood" and "numerous police contact with licensed premises or the patrons of the premises."

That police contact includes an incident described in a filing by the city in another lawsuit, which described an Ann Arbor police report indicating that officers arrived at the bar just as co-owner Jeff Mangray was being attacked at the door of the bar by an unruly man who was carrying - and reaching for - a gun.

According to Postema, police received more than 200 calls at the business since September 2007. Incidents include liquor violations, disorderly conduct cases and assaults. In separate incidents last May, three people were stabbed in the club and fighting broke out inside and outside that resulted in a man being shot in a neighboring parking lot.

Owners Jeff Mangray and his son, Vickash Mangray, of Ypsilanti - who operate the club under the entity VR Entertainment Inc. - also filed a $3 million federal lawsuit against the city of Ann Arbor in January. The owners say officials have made false allegations of illegal activity at the business, subjected it to heightened scrutiny by police and harassed it because its owners and customers are racially diverse.

The pair also were in court recently as their former attorney, David Shand, sought payment of his $6,500 bill and a release from liability as the Mangrays pursued litigation under Detroit attorney Roger Farinha. He did not respond to requests seeking comment on Monday.

Meanwhile, additional litigation surrounds a claim by Shafiq Kasham that he's an investor in the club's liquor license and wasn't properly notified by the city of the March hearing.

The club's Chapter 11 bankruptcy filing was made March 27 in federal court, showing a net liability of $212,500. That figure includes debt of $398,500, and assets that include the $130,000 value of the liquor license.

The bankruptcy seeks to allow the company to reorganize. One recent filing indicated that VR Entertainment was in "serious default" of its lease to landlord Dean Zahn Properties LLC, and the parties approved a payment plan.

According to the bankruptcy petition, VR Entertainment Inc.'s gross earnings from the club was $350,000 in 2011 and $120,000 year-to-date at the time of the filing.

Postema said the state's ruling on Monday is the result of "the city properly following all procedures in having the hearing. ... They had an opportunity to state their case and put out no rebuttal testimony."


Ryon owens

Sat, May 5, 2012 : 4:43 a.m.

The City Attorneys Office, has a Federal Case in Detroit on May 30 infront Judge Paul D.Borman. I have read the complaint filed by the owners of V.R Entertainment Network dba Dream Nite Club and they have a strong case, the City Council clearly violated the Open Meeting Act , their Liquor License Comitee who determs the renewals of Liquor License in the city Ann Arbor is led by Tony Dresinski a paid City Council employee of Ann Arbor. The due process violations in this case is unreal, every american citizen is suppose to get a fair hearing these owners did not, the entire City Council and City Attorneys Office will have a fight in downtown Detroit. I am very familar with the Federal Judge in this case and Judge Borman is a very good judge, the games Mr. Postema plays in the Ann Arbor court system, will not be tolerated by Judge Borman. The fact of the matter is yes you closed the establishment down, but at what cost? This is multi-million dollar law suit and I feel that the damages just went thru the roof, the City Attorney office did not follow proper prosedure in closimg this establishment down......Good Luck infront Borman Mr.Postema you are going to need it!


Sat, May 5, 2012 : 3:50 a.m.

The shows not over until Mary Fayles ......Sings!


Wed, May 2, 2012 : 7:26 a.m.

"... subjected it to heightened scrutiny by police and harassed it because its owners and customers are racially diverse." NAME one bar or restaurant which ISN'T RACIALLY DIVERSE here. LOL! $3 million federal lawsuit eh? Best of luck trying to sell that barrel of soured rhubarb in court. But [sigh] there goes another charming little cabaret from our fair town. LOL! I will miss walking crabwise and swivel necked with my hand on my Glock as I skitter nervously past that place. ;-) And: Good Job Understaffed Ann Arbor Police!! Pat on the back also to the city government for not backing down on the effort to shut that place down.

Ryon owens

Sat, May 5, 2012 : 5:45 a.m.

The City Attorneys office provided 12 Ann Arbor Police officers during the Liquor Comitee Hearing on March 19, all the officers provided hersay evidence. (in one case a officer was testifying on behalf of another officer who could not make the meeting due to a ill family member, this was DOUBLE hersay)The procedures the Ann Arbor police use to conduct their investigations are going to be questioned at the hearing in Federal Court....what if Judge Borman decides the procedures used by AAPD is not proper procedure? Every inmate in jail will be filling for a apeal. This will be a very interesting case to observe, it could really crumble the Ann Arbor Police Department.


Tue, May 1, 2012 : 9:28 p.m.

What? You mean Dream Nite was not an improvement over Studio 4? How shocking!


Tue, May 1, 2012 : 7:50 p.m.

Great, now where are people supposed to go to get drunk and shoot at each other?


Wed, May 2, 2012 : 2:32 p.m.

Little known fact: sometime shortly after 1882, city planners abandoned the idea of making Ann Arbor the Dodge City of the Midwest and went for Athens of the Midwest. Very puzzling. ;-)


Tue, May 1, 2012 : 5:22 p.m.

Maybe move A2 SPARK there and free up the SPARK space for a decent restaurant/coffee house to help increase use of Liberty Plaza... at least during the warmer months.


Tue, May 1, 2012 : 4:10 p.m.

Amen. Now bring me my Cheesecake Factory! Ha!


Tue, May 1, 2012 : 3:58 p.m.

Bring back Maude's!!


Wed, May 2, 2012 : 1:37 p.m.

You can still get the Maude's recipe ribs at Carsons on Plymouth Road....very tasty indeed!

Susie Q

Tue, May 1, 2012 : 10:27 p.m.

and Maude's bbq ribs!

Unusual Suspect

Tue, May 1, 2012 : 2:28 p.m.

Somehow I don't think I will be losing any sleep or shedding any tears over this place ceasing to exist.


Tue, May 1, 2012 : 1:07 p.m.

"Dream" was really a nightmare. You get what you ask for and the actions of the clientele speak for themselves. Can you think of another local business that has had 200+ police calls in the span of a few years? About time!

alan haber

Tue, May 1, 2012 : 12:53 p.m.

from what i've heard over the last years, the city has been wanting to get hold of this building and lot, and get rid of the bar for a long time.


Tue, May 1, 2012 : 4:10 p.m.

Yes, and expect that and a lot of other good stuff to come out in federal court proceedings before Judge Paul Borman. The City of Ann Arbor is still trying to get that club's civil rights action dismissed.

Karen Hart

Tue, May 1, 2012 : 12:33 p.m.

Time for AATA, the DDA or the City to buy this building and create a proper bus mall.


Tue, May 1, 2012 : 11:17 a.m.

Time to reassess the numbers in that bankruptcy filing...


Tue, May 1, 2012 : 1:10 p.m.

Really! If business is that bad, you'd expect that they'd change the business plan or sell out so they'd stop losing money.


Tue, May 1, 2012 : 10:28 a.m.

Excellent. That area, and Parking lot just became safer again. This was long overdue.


Tue, May 1, 2012 : 4:17 a.m.

I'm betting the owners open a "smokeshop" and bong store in the spoy to re-coup this horrible set back.

John of Saline

Tue, May 1, 2012 : 6:16 p.m.

3? Dang. Demand is THAT high?


Tue, May 1, 2012 : 4:13 p.m.

It was a joke. There's already 3 bong shops in that area already.


Tue, May 1, 2012 : 12:05 p.m.

Because stoners have so much disposable income? Might want to rethink that.


Tue, May 1, 2012 : 2:08 a.m.

Best decision ever


Tue, May 1, 2012 : 12:57 a.m.

Mary Fales, Bob West, and City Attorney Steve Postema were down in Lansing today arguing before a 2-member panel of the Liquor Control Commission. But it is not over until its over. Expect some fireworks beore Judge Paul Borman in federal court in the near future.........................

Ryon owens

Sat, May 5, 2012 : 4:55 a.m.

Paul D Borman is a very good Judge he will not tolerate the actions of the City Attorneys office...from what I have read from the complaint filed by Dream and the City's awnser, Dream has a very strong case....dont be supprised if the punitive damages in this case reach multi million dollars!


Sat, May 5, 2012 : 3:54 a.m.

I would have to agree with Roadman this fight is far from over.....The corruption of the City Attorneys office led by Stephen Postema, will come out in federal Court.....

Perry White

Mon, Apr 30, 2012 : 11:33 p.m.

"... allowing fights and the improper use of weapons at the bar." What would be proper use of weapons?


Tue, May 1, 2012 : 10:08 p.m.

RUKiddingMe likes mike gatti's post

Michigan Reader

Tue, May 1, 2012 : 12:46 a.m.

The proper use of weapons is simple---self defense.

mike gatti

Tue, May 1, 2012 : 12:20 a.m.

acerbic barbs