US court clears reinvestment of proceeds from property sale A New York judge has cleared the way for a group of Hong Kong investors including Henry Cheng Kar-shun and Vincent Lo Hong-sui to reinvest proceeds from a record US$1.76 billion property sale in Manhattan, overcoming the objections of US real estate tycoon Donald Trump. Mr Trump, who owns 30 per cent of the 92-acre waterfront property on the Upper West Side of Manhattan known as Trump Place, had sought to prevent the proceeds from being reinvested in another property project. The star of the reality television series The Apprentice argued that his partnership agreement with Mr Cheng, Mr Lo and other investors did not allow for such a transaction. Mr Trump had sued his partners, alleging they breached their fiduciary duty by ignoring rival offers as high as US$3 billion for the property, which includes more than 5,000 flats. He is seeking as much as US$1 billion in damages. In denying Mr Trump's motion to block the reinvestment, Judge Richard Lowe said the property mogul had not shown that the sale proceeds would not be available to him should he eventually prevail when the case went to trial. 'Mr Trump fails to show that the property in which the proceeds are reinvested will be unavailable to satisfy any potential money judgment,' Mr Lowe wrote. Lawyers for Mr Trump immediately appealed the decision. The Hong Kong partners and other investors are keen to close the deal with the Carlyle Group and Extell Development. Under United States law, New World Development managing director Mr Cheng and Shui On Holdings chairman Mr Lo have 45 days to identify another property in which to reinvest the proceeds, otherwise they would have to pay capital gains tax. Mr Trump wants no part of the reinvestment plan, saying the partners wanted to put the money in a property of 'unknown investment quality, in an unknown location'. He argued the sale of the property meant the partnership was over and proceeds should be distributed to the partners. Lawyers for the Hong Kong businessmen argued the partnership was valid until 2044 and Mr Trump's suit was motivated by a desire for an early payout. Far East Consortium International, another investor in the project with an effective 3.5 per cent stake, has said it expected to book between $300 million and $500 million in profit from the sale. It remains unclear how Far East is able to get a share of the profit while Mr Trump is not. The Hong Kong partners' lawyers were silent on this point at a September 1 hearing. The businessmen had earlier offered to pay Mr Trump his share, provided he signed a general release absolving them of liability for any misconduct, but he refused. Mr Trump has also claimed the partnership failed to report US$19.66 million in distributions to Mr Cheng, Mr Lo and others.