The Rushmore and Kelly Coffey (source: CityRealty and Elle)

In the last major court battle of a multi-year escrow dispute at the Rushmore condominium, a State Supreme Court judge ruled in favor of a Wall Street executive who sued to rescind her $6.9 million purchase at the building.

Supreme Court Justice Debra James ordered Extell Development and Carlyle Realty Partners to refund more than $1 million to Kelly Coffey, a Manhattan resident who originally agreed to buy the unit in 2007. The judgment represents Coffey’s down payment, plus interest and fees. [more]

The Rushmore and Gary Barnett, head of Extell

In a last minute and stunning move, the developers of the Upper West Side’s Rushmore condominium filed a federal lawsuit yesterday against state Attorney General Andrew Cuomo seeking to reverse his April rescission order to refund more than $16 million in escrow funds to buyers.

The developers, Extell Development and Carlyle Realty Partners, operating under the name CRP/Extell, also filed a motion in U.S. District Court seeking a temporary restraining order that would block the release of the funds, which include down payments for more than $110 million worth of apartments.

The developers expanded on their previous claims by arguing that a drafting attorney committed a typo or “scrivener’s error,” and claimed that Cuomo’s office failed to allow them to collect evidence or cross-examine the condo buyers on their true motivations for filing the claims, which CRP/Extell claims were to negotiate lower prices in a down market. … [more]

Lawyers for Carlyle Realty Partners and Extell Development, the sponsors of the Rushmore condominium on the Upper West Side, said they plan to challenge last week’s order by Attorney General Andrew Cuomo to refund the deposits of 41 buyers, according to a court filing obtained by The Real Deal. In a letter to state Supreme Court Judge Debra James, lawyers for the sponsor, CRP/Extell, said they plan to file a so-called Article 78 that will challenge the AG ruling, and continue to argue that the disputed Sept. 1, 2008 rescission date was a “typographical error,” that should have been excused. “The AG decision concludes that certain purchasers have a right of rescission based on an obvious typographical error in a single digit in the 757-page offering plan for the Rushmore,” said Simpson Thatcher attorney Laura Murphy, who represents the two companies. The letter was in response to a demand by lawyers for Rushmore buyer Kelly Coffey to get documents and other evidence from CRP/Extell. Coffey, a managing director at JPMorgan Chase, is not one of the 41 buyers that complained to the AG, but filed a lawsuit in state Supreme Court seeking a return of her deposit…. [more]

The Rushmore and Gary Barnett

Extell Development President Gary Barnett conceded defeat after the state attorney general ordered him to release 41 buyers from disputed contracts at the 289-unit Rushmore condominium (click here to see the attorney general’s decision). “We’re not happy about this but we never expected many of these people to close at this point,” Barnett told The Real Deal in a telephone interview. Attorney General Andrew Cuomo ended a 14-month dispute at the Rushmore, located at 80 Riverside Boulevard, after buyers alleged the developer failed to begin closing apartments by a Sept. 1, 2008 deadline. Extell has argued that the missed deadline was due to a “typo” and that closings at the Rushmore were supposed to commence closing a year later, but the AG states not only that Extell failed to back up the claim, but that the alleged error should not negate the buyer’s claims…. [more]

From left: Attorney General Andrew Cuomo, Secretary of Housing and Urban Development Shaun Donovan and the Rushmore

The U.S. Department of Housing and Urban Development has launched an investigation into the Rushmore condominium, amid allegations that the lawyers for the developer, Extell Development, held previously undisclosed meetings with state Attorney General Andrew Cuomo’s office to prevent existing buyers from backing out of their apartment contracts.

HUD officials said that as of May 11, 2009, Extell “voluntarily suspended” the building’s registration under the Interstate Land Sales Full Disclosure Act (ILSA), a federal law that protects consumers in newly constructed condos with more than 99 units. The move would allegedly be a way for the developer to shield itself from ILSA-related claims.

HUD opened the probe after media reports mentioned that 34 buyers filed complaints with the AG’s office. While officials did not disclose why Extell would suspend, documents obtained by The Real Deal show the Rushmore developer was facing an ILSA-based lawsuit prior to the filing…. [more]

Already battling at least 34 buyers trying to back out of their sales contracts, Extell Development is facing a lawsuit from a Wall Street executive claiming that the Rushmore condominium tried to defraud her of her $1 million-plus deposit refund, and failed to obtain key city approvals. Kelly Coffey, a managing director at JPMorgan Chase, filed suit in New York State Supreme Court Sept. 29, alleging the Upper West Side building’s sponsor missed the Sept. 1, 2008 closing deadline by five months, and then illegally amended the offering plan to deny buyers the right to get a refund. “Instead of offering the plaintiff the right to rescind the agreement, as required by the offering plan, the defendant sponsor’s 16th amendment to the offering plan states that purchasers have no right of rescission related to the first closing,” attorneys Philip Hines and Marc Held wrote in the complaint…. [more]