The Real Deal is reporting that Extell Development has finally refunded $15 million to the 40 buyers from the Rushmore who entered into litigation with Extell and Carlyle Realty Partners more than three years ago. The lawsuit began when the buyers, squeamish after realizing that what was market rate when they entered contract was not market rate any more, also realized that Extell had failed to meet the September 2008 closing date promised in its offering plan. Extell then claimed that the offering plan was void because they had meant to write 2009 instead. How, you may well ask, did this ridiculousness get stretched out for over three years? This is how:
April 16, 2009: Buyers who entered contract before the recession begin to have second thoughts about closing once they learn that new buyers are getting significant discounts. They begin to congregate on Streeteasy.
October 9, 2009: The buyers realize that they can back out of the contract due to the 2008 thing and file with the Attorney General. The group grows quickly.
October 23, 2009: Extell offers the rebelling buyers 25 percent discounts to not back out of their contracts. Two of the 36 buyers bite and back out of the lawsuit. Extell president Gary Barnett denies that any discounts were offered.
April 9, 2010: The state Attorney General rules that Extell must release 41 buyers from their contracts, meaning that they'll have to refund $14.5 million in deposits and also lose out on around $105 million in sales.
April 16, 2010: Extell challenges the ruling because apparently no one heard them when they said it was just a typo.
May 11, 2010: Extell and Carlyle sue Attorney General Andrew Cuomo and file a motion for a restraining order that would block the refunds.
May 19, 2010: A U.S. District Court rules against Extell and tells them to give the buyers their money back.
October 5, 2010: A U.S. Court of Appeals upholds the ruling against Extell, but the law firm holding the deposits in escrow won't release them.
October 23, 2010: Extell decides to appeal to the New York State Supreme Court, calling Cuomo's ruling "arbitrary and capricious."
January 25, 2011: A state Supreme Court judge rules against the attorney general's motion to dismiss Extell's latest lawsuit, meaning that the suit will go on (and on, and on...)
February 24, 2011: It is revealed that Extell's lawyers (allegedly) admitted to the Attorney General that the typo defense—seemingly the entire basis of their argument that they shouldn't have to refund the deposits—isn't valid. They are given a week to come up with a new argument.
February 16, 2012: After having their appeal rejected by the New York State Supreme Court, Extell, which has still somehow managed not to refund the deposits, makes yet another last ditch appeal effort, claiming that the court failed to "consider extrinsic evidence of the intent of the parties." Or, in other words: it was a typo.
December 11, 2012: That doesn't work.
December 20, 2012: Extell finally returns the deposits. Whew. Was that so hard? Guess that's the end of th—oh, wait, lawyers for the buyers "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." Sigh. It's the ciiiiiircle of liiiiife.
· Rushmore buyers get $15M refund in long-running contract dispute [TRD]
· Rushmore coverage [Curbed]