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Two Trump Palace buyers want out.

Two prospective purchasers of Trump Palace apartments are seeking recission by the State Supreme Court of contracts to purchase three units in the luxury condominium.

Among the reasons for the request, the thick papers which include the prospectus and all the amendments, cite the loss of the Trump "name brand" value and the nondisclosure of important facts in either the offering plan or the amendments, which relate to some $550,000 million in personal guarantees.

Jonathan S. Sanoff, the Whitman & Ransom attorney who is handling the case for Japanese investors, said he could not comment on pending litigation.

Donald J. Trump's attorney, Jay Neveloff, a partner at Kramer, Levin, Nessen, Kamin & Frankel, said "There's nothing new or novel in the lawsuit."

Although threats of recission have been made by other contract vendess, Neveloff said he has already closed on 40 units, has closing scheduled for 30 more and is negotiation on 50 other units. That would leave several of the original 77 contracted units which have not yet scheduled a closing and are not a part of this lawsuit. There are 283 units in the glamorous highrise on Third Avenue and 69 street.

Other purchasers have discussed the situation, Neveloff remarked, adding, "These people just felt it was better to sue than close."

Two of the contracted units are on high floor. The purchase prices are $2.45 million, $1.8 million and $923,000 and the litigants have already put up 25 percent, $1.29 million of the total $5.17 million, in two payments of 10 percent and 15 percent.

In February, the New York State Attorney General's office game permission for closing to proceed after reviewing information provided by Trump.

Newspaper ads which began to run last week attempted to address "The Rumors" by presenting "The Facts." One of the selling points states it is the "first building in Manhattan to assure the payment of maintenance costs and taxes on any unsold residences for a period of up to six years with a Fund in excess of $12 million." Ironically, that is a requirement that the Attorney General imposed when the financial issues were raised by other prospective purchasers. Trump obtained a $10 million irrevocable letter of credit from Citibank, as well as an additional $3.7 million left from the constructioin loan, and this was pleged to provided common charges and property taxes through 1994 on 204 units which Trump would still own. As part of the deal with the Attorney General, Trump also submitted an affidavit disclaiming any plans to file for bankruptcy as sponsor of the project.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Weiss, Lois
Publication:Real Estate Weekly
Date:May 22, 1991
Previous Article:$10M lease at 3 Becker Farm Road.
Next Article:NYC tax roll closes on May 22, final to be published May 28.

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