The U.S. Court of Appeals today denied a request by Gary Barnett's Extell Development and Carlyle Realty Partners to block the release of $16 million in escrow funds to 41 buyers at the Rushmore condominium at 80 Riverside Boulevard on the Upper West Side, according to an article today by David Jones at therealdeal.com.

The ruling by a three-judge panel upholds a decision by a federal district court judge in May, which ruled that the development entity, CRP/Extell, must release the deposits to the buyers who had complained to state Attorney General Andrew Cuomo after the developer failed to meet a deadline for the first closing.

CRP/Extell immediately appealed in the Second Circuit Court, arguing that refunding the deposits would cause undue hardship, because they would have to file multiple lawsuits to recover the funds from each individual buyer should they win the case on appeal. The panel ruled it cannot overturn the lower court's order to release the escrow funds, because monetary damages can be recovered in the future.

"Here, plaintiff-appellant has failed to make the required showing because it has adduced nothing more than conclusory assertions in support of its claim that one or more defendant-appellees might "spend" the escrow monies and later become insolvent," the panel wrote in its decision. "To award relief based upon these purely speculative allegations would push the standard for injunctive relief beyond its reasonable limit."

Lawyers for the plaintiffs said the ruling means the deposits should be released by the escrow agent.

According to an article today by Craig Karmin at wsj.com the refund is one of the largest ever ordered in such a case.

Most of the sales affected by the ruling, the article said, "were made near the peak of the market and the developers aren't likely to sell units at those prices again."

Under state regulation, a condo developer is required to start closing sales by the end of its stated budget year. In the Rushmore's offering plan for the 275 units, that date was listed as Sept. 1, 2008, and the first closing didn't occur until February 2009.

The developers have said the date was intended to be Sept. 1, 2009, and that the documents contained a trivial clerical error. Attorney Richard N. Cohen, who represented a group of buyers, argued that the contracts need to be enforced as written.

The Rushmore, which is located between 63rd and 64th Streets, has a private theater and billiards room, a fitness center with a swimming pool, a lushly landscaped garden, a rooftop sundeck, an indoor playground, a baby-sitting service, a garage, and a concierge.

It is across 64th Street from The Avery, a 30-story condominium development and both are projects of the Extell Development Corporation on land it acquired from Donald Trump, who has developed several residential towers just to the north.

The Rushmore was designed by Costas Kondylis and Partners, the architectural firm that has also designed the Avery and many of Mr. Trump's projects.

The Rushmore has a 16-story base with corner windows at the north and south and a setback at the 4th floor in the center of the blockfront. The twin towers are setback and are joined at the lower three floors.

Residents were be offered a choice of three kitchen designs with fixtures by Sub-Zero, Viking, Miele and bathrooms have fixtures by Kohler and Waterworks.