Conseco/CNO Financial and Insurers and Insurance

Conseco wins dismissal of GM Building lawsuit

December 10, 2009

Conseco Inc. has won a dismissal of a lawsuit by billionaire real estate developer Sheldon H. Solow that accused the Carmel-based insurance company of fraud in the $1.4 billion sale of New York’s General Motors Building to Macklowe Properties Inc., Bloomberg News reported Wednesday.

U.S. District Judge Barbara Jones in New York this week threw out the lawsuit against Conseco, saying the company’s emergence from bankruptcy in September 2003 wiped out prior legal claims, including those involving the sale of the building on Aug. 28, 2003.

Solow, one of New York’s biggest landlords, sued in 2006, claiming his was “the best and highest credible bid” for the 50-story tower at Madison Avenue and 59th Street. He asked the court to award damages and to nullify the sale to entities controlled by developer Harry Macklowe.

“Conseco is very pleased with the court’s ruling, and we’re hopeful that this marks the end to the multi-year multi-case litigation by Mr. Solow related to the sale of the General Motors building,” Reed Oslan, a lawyer for Conseco, told Bloomberg.

The building once was home to a GM showroom. Donald Trump bought it with Conseco in 1998 for $800 million, which, at the time, was one of the highest prices ever paid for a New York office property.

Conseco’s ownership of the building has been the subject of several lawsuits, including cases against Trump, Solow Building Co. and developer Leslie Dick Worldwide Ltd.

Solow’s suit claimed that Conseco, shortly before it emerged from court protection, told a bankruptcy judge that it would secure the “best deal” for its assets. Instead, Solow said, the company used him as “an unwitting stalking horse to set the price at which their secretly favored buyer Macklowe could then sweep in and purchase the property.”

“The reorganization plan discharges Solow’s pre- confirmation claims,” Jones wrote in a 10-page ruling.
 

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