Rushmore buyers get $15M refund in long-running contract dispute

TRD New York /
Dec.December 20, 2012 01:15 PM

After fighting more than three years of litigation with Extell Development and Carlyle Realty Partners, a group of 40 buyers at the Rushmore condominium said Thursday that they had finally received a $15 million refund from the developers, largely resolving the disruptive dispute.

The legal tangle dates back to February 2009, when buyers began filing complaints with the AG alleging that the Rushmore developers failed to close their first apartment sale by a September 2008 deadline, which would have allowed the buyers to get out of their contracts for the multi-million apartments at the 80 Riverside Boulevard tower. The developers, however, countered that the September 2008 closing date was a “scrivener’s error” that should have read September 2009.

But in an April 2010 rescission order, then New York Attorney General Andrew Cuomo ordered the developers to refund the deposits.

Gary Barnett’s Extell had fought tooth and nail in federal and state court to overturn the order. Earlier this month, the developer lost an appeal before a five-judge panel in a New York State appeals court.

Lawyers for the buyers said they were relieved to finally get the deposits back.

“It has been a pleasure to deliver to each purchaser this week their own money, which they had been deprived of using all these years,” said attorney Richard Cohen, a partner at Coleman & Cohen, which represents about 33 of the buyers. “Many purchasers remarked that the return of their down payments is a life changing event.”

John Coleman, a partner at the same firm, said they continue to pursue a claim with Extell and Carlyle for more than $5 million in interest. State Supreme Court Justice Anil Singh ordered the developers to pay the interest after they refused to refund the deposits.

Extell declined comment. New York Attorney General Eric Schneiderman, who took over the case for Cuomo, was not immediately available for comment.

As The Real Deal previously reported, the developers canceled the contracts and resold many of the apartments, even though the issue was pending in court. It remains unclear exactly how many units have been sold at the Rushmore, although lists 275 recorded sales at an average of $1,502 per square foot.

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