NEW YORK, Aug. 19 -LAWFUEL – The Law News Network — A Manhattan Supreme Court justice yesterday blocked Donald Trump’s attempt to tie up proceeds from the record $1.76 billion sale of Riverside South land.
Supreme Court Justice Herman Cahn on Tuesday issued a stay blocking a
$1 billion “attachment” Trump tried to place on the proceeds of the Riverside
South sale at least until a September 1st hearing the Judge set to decide
whether the attachment should be permanently vacated.
“We believe that the stay is a huge setback for Trump and puts him back at
square one,” said Jonathan Lerner, an attorney with Skadden, Arps, Slate,
Meagher and Flom.
While Trump already publicly claimed in an apparently stalled federal
lawsuit that the sale should have yielded more than the city’s highest-ever
dollar value real estate sale, papers filed by the lawyers for the general
partners contend that Trump is trying to avoid the terms of his 1994
partnership deal and pressure the general partners to immediately cash Trump
out before he is entitled.
After a motion to dismiss Trump’s suit was filed in federal court, Trump
commenced a new action in New York State Supreme Court seeking to “attach” the
proceeds of the sale to block their reinvestment. The motion for attachment,
which he filed with no notification to the general partners — or giving them
a chance to respond — did not try to stop the sale but instead focused on the
proceeds.
The papers filed with the Court assert that Trump, a minority limited
partner, was using the $1 billion attachment to try to pressure the general
partners into capitulating to his unilateral demand for an immediate cash-out.
“In our opinion, Trump’s desire for an immediate cash-out is the reason he
is trying to block the right of the general partners to reinvest the proceeds
of the Riverside South sale,” said Michael Gruenglas, another Skadden, Arps
attorney.”
Trump originally filed a federal lawsuit against six entities called
Hudson Waterfront Corp. and Hudson Waterfront I-V Corps., as well as Hong
Kong-based investors in those corporations. The $1.76 billion sale of the
properties to an investment consortium headed by Extell Development Company
and The Carlyle Group represented the highest dollar value real estate
transaction in city history. That was apparently not enough for Trump, who
admitted in the lawsuit that he held just a 30 percent minority interest in
the properties.
Justice Cahn suspended the attachment and ordered Trump to show cause in a
subsequent hearing why the attachment should not be permanently vacated.
The sale of the property is scheduled to close next month.
