The Real Deal New York

In Rushmore case, appellate court rejects Extell and Carlyle’s claims

Ruling affirms $16M of escrow refunds that were ordered by Cuomo

December 11, 2012 06:00PM
By David Jones

From left: Gov. Cuomo and the Rushmore

A New York State appellate court ruled 5 to 0 that former Attorney General Andrew Cuomo correctly ordered refunds to 41 buyers at the Rushmore, a luxury condominium on Manhattan’s Upper West Side.

The development team, Extell Development and Carlyle Realty Partners, had appealed a ruling by Supreme Court Justice Anil Singh, who previously affirmed the ruling by Cuomo, which involved the rescission of more than $16 million in escrow deposits.

The developers were ordered to refund the money on the basis of missing a September 2008 deadline to hold a first closing on apartment sales at the 200 Riverside Boulevard tower. However, they argued that a simple one-digit typo led to an erroneous date in the condo offering plan, and said the buyers were truly motivated by the 2008 economic collapse, which led to a drop in home values.

Extell and Carlyle claimed in court papers that they asked Cuomo’s office for the right to cross-examine buyers to determine their true motivations, but that the State Attorney General’s office denied that request. Cuomo’s office countered in court papers that the offering plan was a document unilaterally drafted and edited, and that the buyer’s motivation was not a material event, because they had no part in drafting the plan.

“We hope that this will finally put an end to this case, which has dragged on much too long,” said Richard Cohen, who represents more than 30 of the buyers. “The time has certainly come for the Sponsor to return purchasers’ down payments.”

Ed Normand, a partner at Boies, Schiller & Flexner, which is representing Extell and Carlyle, said he had consulted with his client and that they would have no comment.

State Attorney General Eric Schneiderman, whose office took over the case after Cuomo was elected governor, was not immediately available for comment.

Lawyers for the remaining buyers were not immediately available for comment, but were working on a statement.

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