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Most of Apthorp buyers are corporate entities
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The majority of the Apthorp buyers are corporate entities, not individuals. Will they count as bona fide buyers needed to make up the 15% of sold apartments in order for the conversion plan to be declared effective?

Hasn't the plan already been declared effective?

Yep AG has already approved the condo plan as effective.

also remember that corporations can count as people as long as they're "arms-length" buyers.

ali r,
DG Neary Realty

Thanks, front_porch. What does "arms-length" buyer mean? Wellheythere, the conversion isn't effective until the sponsor sells 15% of the units, which is completely separate from the AG approving the black book.

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Oh, I'm not a lawyer.

So let's use as an example an actual offering plan (we're going with the one for Trump World Tower b/c it's handy)

On page 54 it says the plan will be effective (I'm translating from lawyer-ese) once purchase agreements on 15% of the units are in effect. (Remember this is our hypothetical: TWT has been up and running for years).

On page 55 it says the plan won't be declared effective based on purchase agreements in a number of situations: the purchaser hasn't had time to review the plan, for example.

In that long list of situations that don't count is:

"a Purchaser who is Sponsor, the Selling Agent or the Managing Agent, or who is a principal of any of the foregoing or who is related to any of the foregoing or any principal thereof by blood, marriage or adoption or as a business, associate, employee, shareholder or limited partner..."

so that's what I mean by "arms-length" -- you can't be the sister-in-law of the developer, or, to use jason's example, a partner in a shell corporation with the developer, and have that count towards effectiveness.

There is a loophole, of course -- the plan says that you can submit documents to the AG's office arguing that sales to those related parties actually ARE bona-fide sales. But I would bet that sales at, say, discounts to market pricing wouldn't get that waiver from the AG.

ali r.
DG Neary Realty

Ignored comment. Unhide

Where is the very disgruntled formerapthorptenant to give us his input?

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