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    AMBASE ANNOUNCES ADDITIONAL STATEMENT CONCERNING FAVORABLE TAX COURT
      RULING IN THE NETHERLANDS ANTILLES WITHHOLDING OBLIGATION CASE


Greenwich,  CT - May 24, 2001 - AmBase  Corporation  (the  "Company")  announced
today that a favorable ruling was received in a case regarding withholding taxes
in connection with City Investing  Company's  ("City") finance subsidiary in the
Netherlands   Antilles   for  the  years   1979   through   1985   ("Withholding
Obligation").  The Internal  Revenue Service ("IRS")  contended the Withholding
Obligation  was due in a Notice of  Deficiency  issued  on May 11,  1995 and the
issue was pending in the United States Tax Court ("Tax Court"). Based on the Tax
Court's  decision,  City  is not  liable  for  the  payment  of the  Withholding
Obligation.  The IRS has not yet  indicated  if they will appeal the Tax Court's
decision,  but they have until  August 21, 2001 to indicate  their  intention to
file any appeal.

Based on the Tax  Court's  ruling  and an  evaluation  of the IRS's  contention,
counsel has advised,  that although the outcome of an appeal by the IRS, if any,
can by no means be assured,  City has a very  strong case and should  ultimately
prevail. A final disposition of this issue in City's favor would have a material
positive  effect on the  Company's  Consolidated  Statement  of  Operations  and
Financial  Condition.  Notwithstanding the Tax Court's ruling in the Withholding
Obligation  case,  and  counsel's  opinion,  it is not  possible at this time to
determine if the IRS will appeal the Tax Court's decision, the final disposition
of this  issue,  when the  issue  will  ultimately  be  resolved,  or the  final
financial effect. If the IRS were to ultimately prevail on this issue on appeal,
the Company could be liable for City's  Withholding  Obligation plus interest in
excess of the Company's financial resources. A significant factor in determining
the amount of the  Company's  ultimate  liability  in this matter is whether the
Company is primarily liable for the Withholding Obligation and interest pursuant
to  a  contractual   arrangement  between  the  Company  and  City.  See  AmBase
Corporation v. City Investing  Company  Liquidating  Trust,  et. al., as further
discussed  in the  Company's  Annual  Report  on Form  10-K for the  year  ended
December  31,  2000  as  previously  filed  with  the  Securities  and  Exchange
Commission.

Based on the above facts the  Company's  management,  its tax advisors and legal
counsel  are  analyzing  the impact of these  facts on the  Company's  financial
statements.

A more  detailed  discussion  of the  Company's  affairs will be included in the
Company's Quarterly Report on Form 10-Q for the quarterly period ending June 30,
2001 and can also be found in the previously filed Quarterly Report on Form 10-Q
for the quarterly  period ended March 31, 2001, and the Company's  Annual Report
on Form 10-K for the year ended December 31, 2000.
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