Argentina's IRSA ups stake in NY Lipstick building

Wed Jan 5, 2011 5:30pm EST

* IRSA raises stake to 49 pct

* Building housed Madoff headquarters

By Ilaina Jonas

NEW YORK, Jan 5 (Reuters) - An Argentine real estate investment firm has raised its stake in Manhattan's Lipstick Building, known for its unusual shape and which in the recent past housed the offices of convicted swindler Bernard Madoff.

IRSA Inversiones y Representaciones Sociedad Anonima (Irsa Investments and Representations Inc) raised its indirect stake in Lipstick Building owner Metropolitan 885 Third Avenue LLC to 49 percent from about a third, according to a filing with the U.S. Securities and Exchange Commission.

The company, whose main asset is the 34-story building between 53rd and 54th streets, was restructured under a prepackaged bankruptcy filed in U.S. Bankruptcy Court in Manhattan in November.

Under the restructuring plan, the mortgage on the building was reduced to $130 million from $210 million. A $45 million junior debt was canceled with a $2.25 million payment, according to the filing.

On Dec. 30, the new company paid down $15 million of the mortgage, giving IRSA the additional stake.

The building is owned under a ground lease, which typically calls for the building to revert back to the land owner at the end of the lease. The lease, which is owned by SL Green Realty Corp (SLG.N), has a remaining term of 66 years, according to the filing.

When the FBI arrested Madoff on Dec. 11, 2008, U.S. prosecutors estimated that as much as $65 billion flowed through the firm over decades. The disgraced money manager pleaded guilty in March 2009 to running the fraud and is serving a 150-year prison sentence.

The court-appointed trustee liquidating the Madoff firm, Bernard L. Madoff Investment Securities LLC, has estimated in his most recent lawsuits to recover investor money that investors' principal losses amounted to about $20 billion.

The Lipstick Building derives its name from its elliptical shape, which resembles an open lipstick tube, and red granite exterior. It was designed by the architects Philip Johnson and John Burgee, and is one of midtown Manhattan's most recognizable buildings. (Reporting by Ilaina Jonas, editing by Matthew Lewis)

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