Court rules Destiny USA entitled to loan money
Fri, 13 Nov 2009 20:55:02 GMT —
In a three to two split decision, the New York State Supreme Court Appellate Division in Rochester ruled Destiny USA is entitled to resume drawing from the $68 million that is still being held by Citigroup to fund construction of the mall expansion. Destiny had sued Citigroup, complaining that the lender had failed to live up to its agreement to help fund the Carousel Center expansion project.
Destiny USA Holdings released a statement to the media following the court's decision, saying Destiny USA is deeply gratified by the decision of the Court. Our hope is that we can now move forward with Citigroup and bring this important project to completion. That is what we intend to do.
The decision was not a total win for Destiny, though. The court has ordered the mall developer to put up $15 million as a condition of releasing the funds. That is the amount of money that Citigroup was claiming Destiny was deficient in its investment in the project.
Citigroup also offered a comment on the ruling, saying "Citi is grateful for the appellate division's decision to vacate the vast majority of the lower court's findings and rulings. It is also pleased the Court is requiring Destiny to put up a $15 million bond before any further advances are required and until the case is resolved on the merits."
In late May, Citigroup cut off funding for the project and refused to release the remaining portion of a $155 million loan. Citigroup had blamed Destiny for not living up to its share of the funding obligations.
No word yet on when that loan money will be disbursed, or when construction will resume on the project. Work was halted in June after Citigroup stopped its payments to Destiny USA's ownership group, and Destiny in turn stopped paying construction workers and contractors.