Newsday from New York, New York • 59

I I jEl fvW1 41 2,950 10-DAY DOW TREND -mimk ifioa WTFTWTFMTF File Ptiotoa Ian Bruce Eichner, managing general partner of the organization that owns the 72-story CitySpire. The partnership has filed for bankruptcy court protection. NY Agency Bond Debut Turns Sour At the Start By Jill Dutt STAFF WRITER The debut bond sale for an important New York State agency is off to a rocky start as prices plummet below their initial levels, threatening losses for investors and the Wall Street firms that are selling the bonds. Its a matter of debate whether the poor showing is a result of the bonds Bkimpy interest rate, a glut of New York bonds in a volatile market, or skittishness about the states budget crisis or a combination of all three but theres no question that the deal gave a black eye to everyone involved. The 909-million sale, launched last week, is being closely watched because its the first in a long line of borrowings slated by the new Local Government Assistance set up with great fanfare last year as part of Gov.

Mario Cuomos plan to sell long-term bonds to eliminate the need for the annual spring borrowing, which was $4-7 billion last year. The bulk of the bonds had maturities between 10 and 20 years and were priced to yield between 7.30 percent and 7.37 percent. Prices have fallen so much that those yields have increased to between 7.41 percent and 7.5 percent. Investors werent too pleased with the first issue. The investment community was not treated very well, said one institutional investor, speaking on condition of anonymity, who purchased some of the bonds only to see their value plunge.

We were bamboozled, he said, saying that he was told the sale was going better than it actually was. The Wall Street underwriters are more stoic about losses they may have suffered. The sale was "not a disaster, but not a delight, said James Glynn of Dean Witter Reynolds. You could argue we should have made the bonds attractive to eveiyone. On the other hand, we tried to get the very best price for the state, which, in turn, is best for taxpayers.

John Baldwin, manager of municipal bond syndicate at First Boston called the price drop very dramatic, but added that the whole municipal market was caught in a psychological vacuum last week. Investors who had been loading up on new bonds pulled in their horns. In the environment that existed, the bonds would have to offer an almost shocking Story of CitySpire Reaches Chapter 11 BUSINESS NY NEW YORK NEWSDAY, THURSDAY. FEBRUARY 28. 1901..

holds liens against the more than 70 unsold apartments and thus will be among the secured creditors. This is probably the most beneficial thing that could have happened, said Safi. This will bring all the disputes pending into one forum. The partnership owes at least six weeks in common charges to the association. Indeed, Eichner and the project are beset by a host of disputes and financial difficulties.

Besides the mqjor creditors, the City of New York says Eichner owes $3.9 million in back taxes on the CitySpire project. The luxuiy tower also ran into a rail of building problems, including an unsuccessful fight with the city over the fact that the building exceeded city height limits by 14 feet, and claims by the citys Department of Environmental Protection that a whistling created by wind blowing by the tower violates city noise ordinances. Eichner also has been unable to meet obligations at his Metropolis TimesSquare building; the Hahn Co. announced recently that it would pull out of the project until Eichner fulfilled his promises on the high-tech entertainment and office complex. Eichner also is late in constructing a dance studio he agreed to build for the city as part of a deal on CitySpires height problem.

By Pat Wechsler STAFF WRITER Facing lawsuits by its chief creditors and stinging complaints from its million-dollar apartment owners, the partnership that owns CitySpire, developer Ian Bruce Eichners 72-story West Side condominium, filed for protection under federal bankruptcy laws yesterday. The Chapter 11 filing by West 56th Street Associates, a limited partnership in which Eichner is the managing general partner, is expected to stop proceedings on lawsuits by Uniondale-based European American Bank and Toronto-based Bank of Nova Scotia. The banks hold more than $120 million in loans to the partnership for construction of the controversial green-domed luxury tower at 150-156 W. 56th Street. Neither bank had a comment on the filing in federal court in Manhattan.

Eichners attorney would only confirm the filing; Eichner was not available. In addition, the filing will make moot a recent state Supreme Court decision to place the building into receivership because of the partnerships failure to pay common charges for maintenance of the condominium. However, Stuart Saft, a condo association attorney, said he welcomed the filing because the association Please see BONDS on Next Page Soda King Bid for 7UP Fizzles 1987, Honickman bought the Brooklyn franchise for $18 million but the FTC ruled that his control of about 60 percent of the New York soda market would hurt consumers through possible anticompetitive pricing. As a result, Honickman sold his interest in the company to (me of his business partners, Lance Funston. Under Fun-ston, the Brooklyn franchise was forced to file for bankruptcy court protection last October.

New York City. He offered a complex $5. 1 million plan to buy the companys assets and distribute 7UP through his other franchises. Although Honick man's plan was favored by most of the mjor creditors of the 7UP dealer, Goetz said after the six-hour hearing that the deal duplicates" Hon-ickmans earlier purchase of the same company, which the Federal Trade Commission blocked in 1989 as uncompetitive. She said approving the deal would be putting my imprimatur on what the FTC said was an anticompetitive act.

In By Thomas J. Maier STAFF WRITER Several mqjor soda brands will not be distributed in Brooklyn, Queens and Long Island at least until next week because a federal judge yesterday rejected bids to buy the beleaguered Seven-Up Brooklyn Bottling Co. At a raucous hearing in Hauppauge, U.S. Bankruptcy Court Judge Cecilia Goetz rejected a bid from the companys former owner, soda magnate Harold Honickman, who already owns the PepsiCola and Canada Dry bottling plants in Photo bjr Akka Suva Soda magnate Harold Honickman Please see 7UP on Next Page I a 4 441' 1 sm a I 1 d'-j i.