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Thread: Trump sues for $1B over GM building buy

  1. #1

    Default Trump sues for $1B over GM building buy

    Trump sues for $1B over GM building buy


    By ERIC HERMAN
    Daily News Business Writer

    The partnership that owns the General Motors building exploded in rancor yesterday, as Donald Trump filed a $1 billion lawsuit against Conseco for allegedly blocking his attempt to buy them out.

    The suit casts a cloud over the future of one of Manhattan's glitziest office buildings. Last summer, Conseco agreed to sell Trump its 50% interest for $295 million.

    "They indicated that they would do it, but as time went on, they just put more conditions which were not in the original deal," said George Ross, senior vice president of the Trump Organization. "Their position kept getting more and more difficult."

    A Conseco official said the suit was groundless.

    "It's silly. I haven't seen such a rant since my daughter was two," said spokesman Mark Lubbers.

    If Trump loses, he might have to sell Conseco his 50% stake in the GM building for just $15 million. The reason is that Trump initially put up little cash, but agreed to manage and market it.

    At that time, in 1998, Trump paired up with Conseco to buy the building for a whopping $800 million. Located at Fifth Avenue and E. 59th Street, the 50-story tower commands views of Central Park and has a roster of blue-chip office tenants like Estee Lauder and law firm Weil, Gotshal. Its groundfloor is home to CBS' 'The Early Show' and toy store FAO Schwarz.

    "It's one of the top five institutional buildings in New York," said M. Myers Mermel of Tenantwise.

    Last summer's sale pact provided Conseco with a much desired quick-exit strategy as it struggled under a mountain of debt.

    But Ross said Conseco made it impossible for Trump to complete the purchase of its share.

    Under the buyout agreement, Ross said, Trump agreed to pay Conseco $50 million in cash and provide a $200 million loan backed by Deutsche Bank — plus $45 million to be paid later. Trump planned to finance his purchase by borrowing $950 million from Deutsche, paying off the existing mortgage in the process and winding up owning 100% of the GM building.

    But the deal fell apart when Conseco demanded Trump finance it differently.

    After Sept. 11, Trump could no longer find financing at an attractive rate, Ross said.

    "Sept. 11 had a horrendous effect on the financing of any trophy property in the city of New York," he said.

    The agreement between Trump and Conseco has a clause, under which either partner can name a price for its share at any time. The other partner then has to pay the named price for the other 50%, or agree to be bought out for that amount.

    Last month, Conseco demanded to be bought out for $500 million — nearly double what it had agreed to sell its share for last summer.

    Lubbers added that under the partnership agreement, all disputes had to be submitted to arbitration, not a court.

    "I can only surmise that this lawsuit is being pursued for its entertainment value, and I think it's a shame to waste the court's time," he said.


    Original Publication Date: 2/8/02

  2. #2

    Default Trump sues for $1B over GM building buy

    June 13, 2003

    Trump Ordered to Sell His Share of G.M. Building to Insurance Firm

    By THE ASSOCIATED PRESS

    A Manhattan judge yesterday ordered Donald J. Trump to sell his 50 percent share of the $1 billion General Motors Building in Manhattan to the bankrupt Indiana-based insurance and financial services company Conseco Inc.

    Justice Karla Moscowitz of State Supreme Court affirmed the May 28 ruling of an arbitration panel and rejected a request by Mr. Trump's lawyer to throw it out. The judge said she lacked the legal authority to void the panel's 2-1 decision because the panel had not shown a disregard for the law.

    The panel ruled that Trump should relinquish his stake in the 50-story skyscraper, which is at Fifth Avenue and 59th Street across from Central Park, for $15.6 million. The panel said Trump had not followed through on his earlier agreement to buy Conseco's share.

    Conseco and Mr. Trump bought the building jointly in 1998 for $878 million. Conseco put up $211 million, and Mr. Trump paid $11 million.

    Conseco's real estate expert testified that the G.M. Building was now worth about $1.05 billion. The $15.6 million fixed by the arbitrators represents Mr. Trump's proportional share, accounting for the building's increased value.


    Copyright 2003 The New York Times Company

  3. #3

    Default Trump sues for $1B over GM building buy

    Man Turmp is a maniac. He sues the city for raising the taxes or something like that and now this.

  4. #4

    Default Trump sues for $1B over GM building buy

    June 14, 2003

    Trump in Deal to Sell G.M. Building

    By CHARLES V. BAGLI

    Donald J. Trump and an Indiana insurance and financial services company announced yesterday that they had settled their long-running feud over control of the General Motors Building in Manhattan and would immediately put the 50-story marble skyscraper up for sale.

    The building, which commands some of the highest office rents in Manhattan, is expected to sell for more than $1 billion.

    The announcement by Mr. Trump and the insurance company, Conseco Inc., came only one day after Justice Karla Moskowitz of State Supreme Court upheld an arbitration ruling ordering Mr. Trump to sell his 50 percent stake in the property for $15.6 million. After the announcement, Mr. Trump and the company began cobbling together an agreement.

    Conseco, which is bankrupt, has wanted to sell the landmark tower and use its share of the proceeds for its recovery plan. The company was in the United States Bankruptcy Court in Chicago yesterday seeking approval of its plan to emerge from bankruptcy.

    "We are pleased that we've been able to resolve our remaining differences with the Trump organization and avoid delays in monetizing the value of our investment," William J. Shea, chief executive of Conseco, said in a statement released last night.

    Mr. Trump also expressed satisfaction with the settlement, whose terms were not made public.

    "It's a great asset, and I'll be very sorry to see it go," he said. "But it's been a great transaction for Conseco and myself."

    Eastdil Realty has been hired to market the building. The proceeds of the sale will go to pay off a $700 million mortgage and be split, with Conseco getting $211 million and Mr. Trump $15.6 million, according to two people who were briefed on the settlement. Conseco will get most of any remaining proceeds, with a more modest sum going to Mr. Trump.

    Mr. Trump had hoped to hang on to the skyscraper.

    He and Conseco came together in May 1998, when bidding was well under way for the tower. Mr. Trump called Stephen Hilbert, then the chairman of Conseco, suggesting that they join forces. The two men outbid the real estate tycoons Steven Roth, Samuel Zell and Marvin Davis with a last-minute offer of more than $800 million.

    Mr. Trump put up $11 million for a half stake in the property, and Mr. Hilbert guaranteed $200 million in financing from Lehman Brothers and put up $211 million in cash and loans.

    By late 2000, Conseco was in deep financial trouble and Mr. Hilbert had departed. The next year, Mr. Trump agreed to buy out Conseco's stake for $295 million. But the deal foundered.


    Copyright 2003 The New York Times Company

    (Edited by Christian Wieland at 9:07 am on June 14, 2003)

  5. #5

    Default Trump sues for $1B over GM building buy

    August 30, 2003

    G.M. Building Sells for $1.4 Billion, a Record

    By CHARLES V. BAGLI

    Harry Macklowe, the developer whose career has died a thousand deaths, came alive again Thursday night when he signed a contract to buy the 50-story General Motors Building for a record-setting $1.4 billion, the most ever paid for a skyscraper in the United States.

    The big gold letters, T-R-U-M-P, that spelled out the name of a former owner of the G.M. Building were stripped from the marble exterior of the trophy tower on Fifth Avenue between 58th and 59th Streets earlier this year. But do not expect Mr. Macklowe, the man who became infamous 18 years ago for his connection to an illegal demolition in Times Square, to splash his name over the skyscraper.

    According to one person who knows him, Mr. Macklowe has more tasteful plans for the building, whose tenants include Estée Lauder; the Bank of America; Weil, Gotshal & Manges; and the CBS-TV studios. Several rival bidders suggested that Mr. Macklowe could not make money given the price he offered, although similar grousing arose in 1998 when the building sold for $878 million. To get it, Mr. Macklowe did have to outfight and outmaneuver more than two dozen other developers and investors for what is regarded as one of the best office buildings in the world.

    "This would break the record for trophy buildings," said Gerard Mason, executive managing director of Granite Partners, a real estate investment bank that tracks building sales nationwide. "It blows my socks off and it should blow skeptics away. The trophy deal is not dead yet."

    If, as expected, the deal is completed in a month, Mr. Macklowe will be paying $1.4 billion, or about $800 a square foot, the most by far for a single office tower and on a square-foot basis, Mr. Mason said.

    The previous records were the $1.05 billion, or $630 a square foot, that Boston Properties paid to buy Citigroup's headquarters at 399 Park Avenue last year, and the $700 million, or $700 a square foot, that Lehman Brothers paid for 745 Fifth Avenue in 2001.

    Although office rental rates are down and vacancies up in New York, sales of first-class office towers have remained strong. "This price is a testament to lower interest rates, a global belief in the Midtown market and the resilience of trophy buildings in any market cycle," said Mary Ann Tighe, of the CB Richard Ellis real estate firm.

    The sale is also a sign of the enduring importance of cities, said M. Meyers Mermel, a broker who represented one bidder, and of New York's pre-eminent position for foreign and domestic investors.

    Mr. Macklowe issued a terse statement yesterday afternoon saying that his company, Macklowe Properties, had entered into a deal to buy the building from a subsidiary of Conseco Inc., the Indiana-based financial services company that is struggling to emerge from bankruptcy protection.

    "This is one of the premier buildings and locations in the world, and a superb longterm investment for us," said his spokesman, Howard J. Rubenstein.

    Mr. Macklowe did not provide details, but rival bidders and other real estate executives said Mr. Macklowe delivered his winning bid on Wednesday night. He signed the contract the next evening, putting down a $50 million nonrefundable deposit. Nearly the entire transaction is financed by Wachovia Bank, a relative newcomer to the pricey New York real estate market, executives said.

    The other bidders included Wells Real Estate Funds of Atlanta; Jerry Speyer, chairman of Tishman Speyer, which controls Rockefeller Center; a group headed by the investor Lloyd Goldman; Samuel Zell of Equity Office Partners; the investor Marvin Davis; Aby Rosen of RFR Holdings; a billionaire family from Mexico; and investment groups based in Germany like Paramount and Jamestown.

    Although he had been a prolific builder, Mr. Macklowe really made a name for himself in 1985, when his company tore down two single-room-occupancy hotels on West 44th Street during the night without turning off the gas or obtaining permits. He was not criminally charged, but he paid the city $2 million to settle a civil lawsuit, and one of his executives pleaded guilty to criminal misdemeanor charges. Years later, he built the Hotel Macklowe on the site.

    But Mr. Macklowe, like many New York developers, lost a string of buildings, including the hotel, to lenders during the recession in the mid-1990's. Three years ago, he was planning his comeback as a commercial developer with a major new office tower on Madison Avenue. But he got into a dispute with his bank and was forced to abandon the project.

    He and his son William continued to develop smaller-caliber projects in Manhattan until the G.M. Building came along.

    Conseco bought the tower in 1998 for about $878 million in partnership with Donald J. Trump, who put up only $11 million for his half-stake in the property. Conseco guaranteed $700 million in financing, while Mr. Trump ran the building. But Conseco soon collapsed under the weight of its debt and the partners had a falling out. They settled their differences after Mr. Trump lost a court battle in June, clearing the way for a sale; his name came off the building the next day.

    "It's a great building in a great location," Mr. Trump said yesterday. "I did a great job in order to make it a great building."

    Conseco hired Eastdil Realty to conduct an auction, expecting to get up to $1.2 billion for the property. More than two dozen bidders weighed in, several with bids of $1.3 billion, according to real estate executives. Nine bidders showed up on Wednesday, including a newcomer, Mr. Macklowe, who was willing to commit $50 million, a sum that separated him from the bunch.


    Copyright 2003 The New York Times Company

  6. #6
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    Soros rigged bid on city's GM building - suit

    A real estate investment giant is accusing billionaire George Soros of plotting to rig the sale of midtown's General Motors building.

    Leslie Dick Worldwide Ltd. claims in court papers made public yesterday that Soros helped real estate mogul Harry Macklowe scheme to undercut Dick's bid for the landmark 50-story tower.

    The lawsuit contends the seller, Conseco, rejected Dick's $1.5 billion bid, which was $100 million higher than Macklowe's offer.

    The suit, filed in Manhattan Supreme Court, charges that Macklowe put up no money and was working as a front man to help Soros wrest control of the white marble high-rise at Fifth Ave. and E.59th St.

    Soros, the suit claims, put up $350 million toward the purchase.

    "The entire bidding and contract award process engaged in by the defendants was improper, unlawful and permeated with fraud," Dick said in the lawsuit.

    Dick asked that the September 2003 sale of the building be nullified and that $750 million in damages be awarded.

    "We believe the lawsuit is without merit and we will defend it vigorously," said Conseco spokesman Jim Rosensteele.

    A spokesman for Soros, Michael Vachon, said, "The case is entirely without merit."

    Macklowe spokesman Howard Rubenstein agreed, saying, "This is an absurd lawsuit."

    A 2003 suit filed in Delaware by Solow Building Corp. also charged that the auction was "a sham," according to court papers. That suit was later withdrawn.

    Solow's "lawyers are currently considering their options over whether to revisit the 2003 litigation," a spokesman said.

    Helen Peterson

    Originally published on July 12, 2006

    All contents © 2006 Daily News, L.P.

  7. #7

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    Group to pay $3.95 billion for GM building, 3 other towers
    By DAVID B. CARUSO
    Associated Press Writer

    NEW YORK (AP) -- A real estate investment group has agreed to pay nearly $3.95 billion for four Manhattan office towers, including the landmark General Motors building on Fifth Avenue.

    The deal, one of the richest ever for New York City office space, was announced Saturday by Boston Properties, a publicly traded company led by publisher and real estate baron Mortimer Zuckerman.

    Boston Properties said it and other, unnamed investment partners, would pay about $1.47 billion in cash and take on $2.47 billion in debt to acquire the portfolio from New York developer Harry Macklowe.

    The portion of the sale related to the General Motors building would set a new record price for a U.S. office building.

    The 50-story tower, built in 1968 at the southeast corner of Central Park, occupies a full city block and is best known as the home of two Fifth Avenue tourist attractions, the FAO Schwarz toy emporium and an Apple store with a glass-cube entrance inspired by the Louvre Museum in Paris.

    Boston Properties didn't disclose an exact price for the building, but said the debt portion of the purchase alone would be $1.9 billion, which would exceed the previous record price of $1.8 billion set in 2006 by a 41-story building six blocks further south on Fifth Avenue.

    The other buildings included in the sale are a 39-story tower at 540 Madison Avenue, a 23 story tower at 125 West 55th Street and the 44-story Two Grand Central Tower.

    The gem of the package, though, is the GM Building, which has 2 million square feet of rentable office space in one of the most coveted locations in New York City.

    Macklowe bought the tower for $1.4 billion in 2003 as part of a rapid, $7 billion expansion of his holdings in Manhattan, but ran into credit problems related to the deal and has been pressured into unloading several of the properties.

    Other suitors for the GM building had included real-estate investors Joseph Cayre and Larry Silverstein.

    Copyright 2008 New York Post


  8. #8

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    Thats one helluva lawsuit.

    I love this original artwork by The Hollywood Chef.

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