The Real Deal New York

GM Building lawsuit to be heard

April 09, 2008 05:02PM
By David Jones

A legal challenge to Harry Macklowe’s ownership of the General Motors Building will be heard Thursday as lawyers for developer Leslie Dick appeal his fraud and conspiracy case to New York State Supreme Court.

The suit alleges the 2003 sale of the GM Building to Macklowe Properties Inc. was rigged, and that Macklowe was a front man for billionaire investor George Soros, who Dick alleges masterminded the entire auction.

“We believe that unless we are afforded the opportunity for discovery there will always be taint over the sale of the GM Building,” said Robert Hantman, attorney for Leslie Dick Worldwide.

Hantman argues that Judge Karla Moscowitz prematurely dismissed an amended complaint previously filed by the company Leslie Dick Worldwide, without giving the plaintiff the opportunity to question the defendants under oath.

Macklowe is facing a similar claim by rival developer Sheldon Solow, who claims the $1.4 billion sale of the GM building from Canseco Inc. in 2003 was the result of a fraudulent auction process.  

Leslie Dick maintains that he was the highest bidder for the GM building and that Macklowe was allowed to submit his bid for the building after all of the confidential bids were submitted.

Macklowe Properties declined comment. Soros has previously denied masterminding the sale.

Macklowe put the General Motors building up for sale in January, hoping to bring in $3.5 billion to help pay off nearly $7 billion in debts he incurred following his acquisition of seven Midtown office buildings from Equity Office last year.  

The legal disputes and the GM building’s steep price have apparently scared off several bidders, including World Trade Center developer Larry Silverstein. Macklowe is now reportedly in talks with real estate and media tycoon Mort Zuckerman on a deal to sell the building for $2.8 billion.

In the meantime, Deutsche Bank has put the seven former Equity Office buildings up for sale, with Eastdil Secured reportedly marketing 1301 Sixth Avenue and Cushman & Wakefield marketing 850 Third Avenue and 65 East 55th Street.

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