In other words, though the project may be closer than ever, it's not over, given the escrow provisions.
An 11/24/09 Project Finance article headlined Goldman plans Nets offering memo next week (full article only to subscribers) stated:
The legal challenges have placed one important kink in the deal's structure. If the bonds are sold but the issuer does not have free and clear title to the land, the proceeds would be placed in escrow by the bonds' trustee, Bank of New York Mellon, and only released when the issuer has control of the site. If, within a year, the project does not have control of the site, the proceeds of the bonds would be returned to the lenders, and Forest City Ratner has promised to pay capitalised interest to bondholders and a make-whole premium to bondholders and, if necessary, the monoline. According to Jonathan Beyer, senior counsel at the ESDC, the issuer has not obtained a separate ruling from the Internal Revenue Service on the escrow arrangement, though it has relied upon IRS rulings on the use of a Pilot structure.Bond Buyer
An 11/25/09 Bond Buyer article headlined Brooklyn Arena Project Gets Board's Approval; N.Y. Wins Eminent Domain Lawsuit (full article only to subscribers):
The New York State Court of Appeals, the state's highest court, yesterday upheld a lower court ruling that the state had the right to seize property on behalf of the private developer. Other suits are still pending and the bond proceeds will be held in escrow for up to one year after which they would be used to redeem the outstanding bonds if the developer has not secured possession of the land for the arena.