Vulture circles Olympia & York's Manhattan offices

NEW YORK - Many of the New York office towers owned by Olympia & York may soon become the property of Leon Black, the former head of mergers and acquisitions at Drexel Burnham Lambert, who runs one of America's largest 'vulture' funds, writes Larry Black.

O&Y bankers confirmed yesterday that Mr Black's Apollo Fund had bought the claims on seven of their 11 Manhattan buildings, giving him a virtual veto on the disposition of the properties. Mr Black can now use the threat to foreclose on the properties, to either take control of the towers, or to demand a large stake in the company.

The US arm of the dollars 20bn ( pounds 13.6bn) Reichmann family empire - which collapsed in 1992 with the bankruptcy of its Docklands development in London - has defaulted on most of its bank obligations but has remained out of bankruptcy court.

While the company is technically controlled by the creditors of its former Canadian parent, its management has been conducting its own talks with the banks which hold some dollars 5bn in mortgages and bonds secured by the towers.

Earlier this week, Apollo, which had acquired claims on two of the buildings last year, reportedly paid a bank group led by JP Morgan 50 cents on the dollar for dollars 140m worth of debt backed by five more towers.