The legal battle between Destiny developers and Citigroup added another chapter of legal and public relations muscle flex. Citigroup announced it would appeal the Appellate Division decision from ten days ago that told the bank to get the money flowing to the mall expansion again. The developers struck back a short time later saying it's time to move past the courts and let congress investigate Citigroup.
Both sides cite the unusual nature of this development deal as the reason they are taking their cases to another level. The bankers say the Appellate Division's ruling was unprecedented in state history because it forces a lender in New York to loan money when the bank says the borrower is in default. Destiny says the critical nature of this development to the community and the federal assistance money that helped bail out Citigroup during the banking crisis last year are enough reason for congress to hold an inquiry into the matter.
Destiny specifically cited a letter it sent to Congressman Dan Maffei about the inquiry idea. Late today Maffei issued a statement about the conflict between the two sides, but completely skipped any reference to an inquiry. In other words, he was not biting on the idea of prime time C-Span with Bob Congel under oath on one side of the table and a row of bankers in deep blue suits on the other. The developers are also making the same request of the senators from New York.
On a few occasions I have wondered if the next step of the legal process would force both sides to negotiate a settlement to get the project moving again. This latest volley makes it clear there are two sides entrenched. The developers are claiming full victory and it's time to give us the spoils. The bankers are saying not so fast we still have ammunition and soldiers in the fight.
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