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Solow drops Conseco lawsuit over GM building in NY

By Jonathan Stempel

NEW YORK (Reuters) - Billionaire New York real estate developer Sheldon Solow has dropped his lawsuit accusing insurer Conseco Inc of fraud over the $1.4 billion auction in 2003 of the General Motors Building in midtown Manhattan.

Solow had alleged in a August 2006 complaint that he had submitted the best and highest bid to buy the 50-story tower, but that Conseco <CNO.N> rigged the auction by using his bid to set a price for rival developer Harry Macklowe, who ultimately bought the property.

The voluntary dismissal was disclosed in a joint filing by Solow and Conseco in Manhattan federal court. The case was dismissed with prejudice, meaning it cannot be brought again.

Solow spokesman Michael Gross declined to comment immediately. Reed Oslan, a partner at Kirkland & Ellis LLP representing Conseco, said his client "is pleased that it has now finally resolved all of the litigation relating to the 2003 sale."

U.S. District Judge Barbara Jones had in December rejected Solow's claims, but the developer appealed to the U.S. Second Circuit Court of Appeals. Monday's dismissal ends that appeal.

One of New York's best-known office towers, the GM building is located near the southeast corner of Central Park. It was once half-owned by the developer Donald Trump, and is where CBS Corp <CBS.N> broadcasts its morning program "The Early Show."

Solow had sued Carmel, Indiana-based Conseco for at least $35 million, alleging that his bidding tied up hundreds of millions of dollars he could have used elsewhere.

Conseco sold the building on August 28, 2003, just 11 days before it emerged from bankruptcy protection.

In her ruling, Jones concluded that Solow could not sue the reorganized Conseco for alleged wrongdoing of the "old" Conseco because he had no claims alleging misconduct or fraud taking place after the company emerged from bankruptcy.

Boston Properties Inc <BXP.N> led a joint venture that acquired the GM building from Macklowe Properties for about $2.8 billion in June 2008.

The case is Solow v Conseco Inc et al, U.S. District Court, Southern District of New York, No. 06-05988.

(Reporting by Jonathan Stempel; Editing by Richard Chang)

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