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Initial Legal Analysis of AG Settlement from Doug Wasser (by Jeffrey W.):

RedWeek frequently consults with Manhattan attorney Doug Wasser for his analysis of the proceedings. As some of you may know, Doug has 33 clients who are Manhattan Club owners who asked him to serve as a liaison with the Attorney General's office. From our perspective, Doug knows as much about the case as any lawyer who is NOT directly participating in the AG vs. Eichner case.

We asked Doug to give his initial perspective on the $6.5 million settlement agreement. Here are his comments:

“TMC has 15,000+ unit owners, all with different agendas, and seeking different things. The statute of limitations to reverse a sale may have expired for longer term owners. So, hopes for a monetary settlement for longer term owners may actually have been limited. I expect that that the $6.5 million restitution fund may go mostly to recent purchasers, whose rights may not yet have lapsed from the passage of time.

"The project is at serious financial risk as we speak, and one way to address its collapse and hopefully restore some confidence and unit market value, is to kick out the sponsor and put in a new regime in its place.

"For sure, I would have hoped that the AG would have extracted a huge settlement from the sponsor to distribute to the whole community, but I have some doubts as to whether that was ever legally in the cards, or whether there would still be a project worth saving by the time a larger monetary settlement was obtained. There still may be grounds for a class action at this point. Who knows? But that’s not my bailiwick. I’ve heard rumors of some class action attorneys in the wings. We’ll see what happens.

"Now that the sponsor will be divested of control, the project may hopefully be able to reclaim some market confidence and come back to firmer footing. And that could be the tide which lifts all boats.

"Time will tell whether this disposition is workable." ----Douglas Wasser