The positive ruling for the lender comes two months after a Federal Court found Citicorp guilty of fraudulently foreclosing on architects Richard and Glenn Storek's Old Oakland project. The Storeks convinced a jury the bank had prevented them from landing tenants by denying funds for necessary construction and tenant improvement work.

While happy about the punitive damages victory - the court ruled California law bans imposition of punitive damages in this case - Citicorp has vowed to pursue a challenge to the compensatory ruling. Industry sources say the lender fully intends to put the property on the market in the near future in a bid to get it off the lender's balance sheets.

Citicorp's decision to foreclose on the Storeks followed the brothers' methodical efforts to restore and redeveloping a dozen 19th century buildings in a two block area of downtown area. The Storeks efforts, albeit very expensive, began in the late '70s. Despite their efforts, the city's high-crime reputation made it difficult to lease space as quickly as the two had hoped.