FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


             [X]  Quarterly Report Pursuant to Section 13 or 15(d) of the
                           Securities Exchange Act of 1934


                   For the quarterly period ended June 30, 2001

          [  ]  Transition Report Pursuant to Section 13 or 15(d) of the
                           Securities Exchange Act of 1934

                          Commission file number 1-7265


                               AMBASE CORPORATION


             (Exact name of registrant as specified in its charter)


       Delaware                                    95-2962743
(State of incorporation)                  (I.R.S. Employer Identification No.)


                           100 PUTNAM GREEN, 3RD FLOOR
                        GREENWICH, CONNECTICUT 06830-6027


              (Address of principal executive offices)     (Zip Code)

                                (203) 532-2000

                  (Registrant's telephone number, including area code)




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

YES     X        NO
     -------         -------


At June 30, 2001, there were 46,208,519 shares of registrant's common stock,
$0.01 par value per share, outstanding, excluding 126,488 treasury shares.


<PAGE>

AmBase Corporation


Quarterly Report on Form 10-Q
June 30, 2001
<TABLE>
<CAPTION>
CROSS REFERENCE SHEET FOR
PARTS I and II                                                                                                 Page
                                                                                                             ------
<S>          <C>                                                                                                <C>

PART I - FINANCIAL INFORMATION

Item 1.      Financial Statements.................................................................................1

Item 2.      Management's Discussion and Analysis of
                   Financial Condition and Results of Operations..................................................7

Item 3.      Quantitative and Qualitative Disclosures About Market Risk..........................................11

PART II - OTHER INFORMATION

Item 1.      Legal Proceedings...................................................................................12

Item 2.      Changes in Securities and Use of Proceeds...........................................................13

Item 3.      Defaults Upon Senior Securities.....................................................................13

Item 4.      Submission of Matters to a Vote of Security Holders.................................................13

Item 5.      Other Information...................................................................................13

Item 6.      Exhibits and Reports on Form 8-K....................................................................13
</TABLE>

<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                       AMBASE CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Operations
                   Second Quarter and Six Months Ended June 30
                                   (Unaudited)
                       (in thousands, except per share data)

<TABLE>
<CAPTION>
<S>                                               <C>            <C>               <C>              <C>

                                                            Second Quarter                       Six Months
                                                        2001             2000              2001             2000
                                                        ====             ====              ====             ====

Operating expenses:

Compensation and benefits...................      $      826      $       884       $     1,710      $     1,823
Professional and outside services...........             326            1,069               391            1,359
Insurance...................................              10               23                28               37
Occupancy...................................              44               22                67               46
Other operating.............................              30               42                78               78
                                                    --------         --------          --------         --------
                                                       1,236            2,040             2,274            3,343
                                                    --------         --------          --------         --------
Operating loss..............................          (1,236)          (2,040)           (2,274)          (3,343)
                                                    --------         --------          --------         --------
Interest income.............................             782              676             1,313            1,258
Reversal of withholding obligation reserve..          66,388                -            66,388                -
Other income................................              56            8,308                99            8,358
                                                    --------         --------          --------         --------
Income before income taxes..................          65,990            6,944            65,526            6,273
Income tax expense..........................             (55)             (55)             (110)            (110)
                                                    --------         --------          --------         --------
Net income .................................     $    65,935     $      6,889       $    65,416      $     6,163
                                                       =====            =====             =====            =====

Earnings per common share:

Net income  - basic.........................     $      1.43     $       0.15      $       1.42      $      0.13
Net income  - assuming dilution.............            1.42             0.15              1.41             0.13
                                                       =====            =====             =====            =====

Average shares outstanding..................          46,209            46,209           46,209           46,199
                                                       =====            =====             =====            =====
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                  (in thousands)
<TABLE>
<CAPTION>
<S>                                                                                  <C>                <C>
                                                                                       June 30,        December 31
                                                                                           2001               2000
                                                                                    (unaudited)
                                                                                       ========          =========
Assets
Cash and cash equivalents.........................................................   $     1,025        $    4,844
Investment securities - held to maturity (market
   value $46,219 and $46,595, respectively).......................................        46,208            46,547
Investment in SDG, Inc. at cost...................................................         1,250             1,250
Other assets......................................................................         2,889               461
                                                                                       --------           --------

Total assets......................................................................   $    51,372         $  53,102
                                                                                          =====              =====
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued liabilities..........................................   $      894         $    1,889
Supplemental retirement plan......................................................        6,357              6,033
Postretirement welfare benefits...................................................          989              1,053
Other liabilities.................................................................          106                 90
Litigation and contingency reserves...............................................        1,707              1,746
Withholding obligation reserve....................................................           --             66,388
                                                                                       --------           --------
Total liabilities.................................................................        10,053            77,199
                                                                                       --------           --------
Commitments and contingencies.....................................................           --                 --
                                                                                       --------           --------
Stockholders' equity:
Common stock......................................................................          463                463
Paid-in capital...................................................................      547,940            547,940
Accumulated deficit...............................................................     (506,437)          (571,853)
Treasury stock....................................................................         (647)              (647)
                                                                                       --------           --------
Total stockholders' equity........................................................       41,319            (24,097)
                                                                                       --------           --------

Total liabilities and stockholders' equity........................................   $   51,372         $   53,102
                                                                                          =====              =====
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
                                           AMBASE CORPORATION AND SUBSIDIARIES
                                          Consolidated Statements of Cash Flows
                                                 Six Months Ended June 30
                                                       (Unaudited)
                                                      (in thousands)

<TABLE>
<CAPTION>
<S>                                                                                  <C>                  <C>

                                                                                           2001               2000
                                                                                           ====               ====
Cash flows from operating activities:
Net income........................................................................    $  65,416           $  6,163
Adjustments to reconcile net income to net cash provided (used) by operations:
Other assets......................................................................          (21)                27
Accounts payable and accrued liabilities..........................................         (995)              (612)
Reversal of withholding obligation reserve........................................      (66,388)                --
Litigation and contingency reserves uses..........................................          (39)              (101)
Accretion of discount - investment securities.....................................       (1,262)            (1,231)
Other, net........................................................................          292                171
                                                                                       --------           --------
Net cash provided (used) by operating activities..................................       (2,997)             4,417
                                                                                       --------           --------
Cash flows from investing activities:
Maturities of investment securities - held to maturity............................       48,585             66,600
Purchases of investment securities - held to maturity.............................      (46,982)           (72,482)
Fixed assets purchase.............................................................       (2,434)               -
Other, net........................................................................            9                -
                                                                                       --------           --------
Net cash used by investing activities.............................................         (822)            (5,882)
Cash flows from financing activities:
Stock options exercised...........................................................           --                153
                                                                                       --------           --------
Net cash provided by financing activities.........................................           --                153
                                                                                       --------           --------
Net decrease in cash and cash equivalents.........................................       (3,819)            (1,312)
Cash and cash equivalents at beginning of period..................................        4,844              2,646
                                                                                       --------           --------
Cash and cash equivalents at end of period........................................    $   1,025           $  1,334
                                                                                          =====              =====
Supplemental cash flow disclosures:
Income taxes paid.................................................................    $     144         $      125
                                                                                          =====              =====
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>
                      AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 1 - Organization

The accompanying  consolidated  financial  statements of AmBase  Corporation and
subsidiaries (the "Company") are unaudited and subject to year-end  adjustments.
All material intercompany transactions and balances have been eliminated. In the
opinion of management, the interim financial statements reflect all adjustments,
consisting only of normal  recurring  adjustments  unless  otherwise  disclosed,
necessary for a fair statement of the Company's  financial  position and results
of operations.  Results for interim  periods are not  necessarily  indicative of
results for the full year. Certain reclassifications have been made to the prior
year  consolidated  financial  statements  to  conform  with  the  current  year
presentation.  The  consolidated  financial  statements  have been  prepared  in
accordance  with  generally  accepted  accounting   principles   ("GAAP").   The
preparation of financial  statements in conformity with GAAP requires management
to make certain estimates and assumptions, that it deems reasonable, that affect
the reported  amounts of assets and  liabilities  and  disclosure  of contingent
assets and liabilities at the date of the financial  statements and the reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from such estimates and assumptions.

The Company  continues  to evaluate a number of  possible  acquisitions,  and is
engaged in the management of its remaining assets and liabilities, including the
contingent  and  alleged  liabilities,  as  described  in Part II - Item 1.  The
Company  intends to aggressively  contest all pending and threatened  litigation
and governmental proceedings, as well as pursue all sources for contributions to
settlements.  The unaudited interim financial statements presented herein should
be read in  conjunction  with the Company's  consolidated  financial  statements
filed in its Annual Report on Form 10-K for the year ended December 31, 2000.

The  Company's  main  source of  non-operating  revenue  is  interest  earned on
investment  securities  and cash  equivalents  and  rental  income on the leased
portion of the building owned by the Company.  The Company's  management expects
that operating  cash needs for the remainder of 2001 will be met  principally by
the Company's  current  financial  resources,  and the receipt of  non-operating
revenue  consisting  of  interest  income  on  investment  securities  and  cash
equivalents and rental income.

Note 2 - Legal Proceedings

The Company  has  certain  alleged  liabilities  and is a  defendant  in certain
lawsuits and governmental  proceedings.  The accompanying consolidated financial
statements  do not include any  adjustments  that might  result from an ultimate
unfavorable  outcome  of  these  uncertainties.   Although  the  basis  for  the
calculation  of the  litigation  and  contingency  reserves and the  withholding
obligation  reserve are  regularly  reviewed  by the  Company's  management  and
outside legal counsel,  the assessment of these reserves includes an exercise of
judgment  and is a matter of  opinion.  At June 30,  2001,  the  litigation  and
contingency  reserves were $1,707,000.  For a discussion of alleged liabilities,
lawsuits and governmental proceedings, see Part II - Item 1.

In  connection  with the  liquidation  of City  Investing  Company  ("City") the
Company,  among others,  contractually  assumed certain tax liabilities of City,
which, prior to September 1985, owned all the outstanding shares of Common Stock
of the Company.  Other liabilities were assumed by, among others, City Investing
Company Liquidating Trust (the "Trust").  For all periods through 1992, the only
issue that remains in dispute with the Internal  Revenue Service ("IRS") is with
respect to withholding  taxes in connection with a Netherlands  Antilles finance
subsidiary of City ("Withholding Obligation"). On May 24, 2001 the United States
Tax Court ("Tax Court") ruled in favor of City,  holding that City is not liable
for the payment of the withholding taxes.

The Company's management, after consultation, with its accounting, tax and legal
advisors decided to reverse its Withholding  Obligation  reserve of $66,388,000.
This  decision is based upon (i) an analysis of the recent  favorable  ruling in
the Tax Court,  (ii) the Company's  case pending in the United  States  District
Court for the  Southern  District of New York against the Trust (the "City Trust
NY Action") (for further  information see Part II - Item 1 - Legal  Proceedings,
AmBase  Corporation v. City Investing  Company  Liquidating Trust et al. and the
Company's  Annual Report on Form 10-K for the year ending December 31, 2000) and
(iii) the $9,500,000,  plus interest that remains available in an escrow account
which was part of the Company's June 2000 settlement agreement with SF Holdings,
as further  discussed in the  Company's  Annual Report on Form 10-K for the year
ending December 31, 2000.

<PAGE>

                    AMBASE CORPORATION AND SUBSIDIARIES
            Notes to Consolidated Financial Statements (continued)

If (i) the IRS  were to  eventually  appeal  and  prevail  on this  issue in the
circuit court and (ii) the Company is found  primarily  liable in the City Trust
NY Action,  the Company,  could be liable for some or all of City's  Withholding
Obligation  plus  interest.  Such an amount could be in excess of the  Company's
financial  resources,  although  the  Company  believes  this  outcome is highly
unlikely.  The IRS has not yet indicated  whether it will appeal the Tax Court's
decision, but it has until August 21, 2001 to indicate its intention to file any
appeal.  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.

For a further discussion with regard to the Withholding  Obligation  proceeding,
see  Item 2 -  Financial  Condition  and  Part II - Item 1 - Legal  Proceedings,
Dispute with Internal Revenue Service over Withholding Obligations  (Netherlands
Antilles).

See Part II - Item 1 - Legal Proceedings, for a discussion of Supervisory
Goodwill Litigation.

Note 3 - Cash and Cash Equivalents

Highly liquid investments, consisting principally of funds held in short-term
money market accounts, are classified as cash equivalents.

Note 4 - Investment Securities

Investment securities - held to maturity consist of U.S. Treasury Bills with
original maturities of one year or less and are carried at amortized cost based
upon the Company's intent and ability to hold these investments to maturity.

Investment securities - held to maturity at June 30, 2001 and December 31, 2000
consist of the following:
<TABLE>
<CAPTION>
                                               June 30, 2001                                December 31, 2000
                             =======================================         ==========================================
<S>                         <C>             <C>            <C>               <C>             <C>          <C>

                                                            Cost or                                         Cost or
                              Carrying       Amortized         Fair           Carrying      Amortized          Fair
(in thousands)                   Value            Cost        Value              Value           Cost         Value
                              ========      ==========      =======          =========      ==========       ======


U.S. Treasury Bills          $  46,208       $  46,208     $  46,219         $  46,547       $ 46,547      $  46,595

                              =======          =======        ======            ======        =======         ======
</TABLE>
The gross unrealized gains on investment securities was $11,000 gain at June 30,
2001 and $48,000 gain at December 31, 2000.

Other investment securities consist of convertible preferred and/or common stock
in AMDG, Inc., which were purchased through private  placements,  are classified
as other  assets,  and are  carried at cost  which  approximates  market  value;
$350,000 at June 30, 2001 and December 31, 2000.

Note 5 - Income Taxes

The Company and its 100% owned domestic subsidiaries file a consolidated federal
income tax return.  The Company  recognizes  both the current and  deferred  tax
consequences  of all  transactions  that have been  recognized  in the financial
statements,  calculated  based on the provisions of enacted tax laws,  including
the tax rates in effect for current and future  years.  Net  deferred tax assets
are  recognized  immediately  when a more likely than not criterion is met; that
is, unless a greater than 50% probability  exists that the tax benefits will not
actually be realized  sometime in the future.  The Company has  calculated a net
deferred  tax asset of $27 million as of June 30, 2001 and  December  31,  2000,
arising  primarily  from net operating  loss  carryforwards/carrybacks  ("NOL"),
alternative minimum tax ("AMT") credits and the excess of book over tax reserves
(not  including the  anticipated  tax effects of NOL's  expected to be generated
from the Company's tax basis in Carteret  Savings  Bank,  F.A. and  subsidiaries
("Carteret"),  resulting  from the election  decision,  as more fully  described
below).  A valuation  allowance has been established for the entire net deferred
tax asset,  as  management,  at the current time,  has no basis to conclude that
realization is more likely than not.

<PAGE>

                      AMBASE CORPORATION AND SUBSIDIARIES
              Notes to Consolidated Financial Statements (continued)

As a result of the Office of Thrift Supervision's  December 4, 1992 placement of
Carteret  in  receivership,   under  the  management  of  the  Resolution  Trust
Corporation ("RTC")/Federal Deposit Insurance Corporation ("FDIC"), and proposed
Treasury  Reg.  ss.1.597-4(g),  the  Company had  previously  filed its 1992 and
subsequent  federal  income tax returns  with  Carteret  disaffiliated  from the
Company's  consolidated  federal  income  tax  return.  Based upon the impact of
Treasury  Reg.  ss.1.597-4(g),  which was issued in final form on  December  20,
1995, a continuing review of the Company's tax basis in Carteret, and the impact
of prior year tax return  adjustments  on the Company's  1992 federal income tax
return as filed,  the Company decided not to make an election  pursuant to final
Treasury  Reg.   ss.1.597-4(g)  to  disaffiliate  Carteret  from  the  Company's
consolidated  federal  income tax return  effective  as of December 4, 1992 (the
"election decision").

The  Company has made  numerous  requests to the  RTC/FDIC  for tax  information
pertaining to Carteret and the resulting successor institution, Carteret Federal
Savings Bank ("Carteret FSB"); however all of the information still has not been
received.  Based on the Company's election decision, as described above, and the
receipt of some of the requested information from the RTC/FDIC,  the Company has
amended its 1992  consolidated  federal income tax return to include the federal
income tax effects of Carteret  and  Carteret  FSB.  The Company is still in the
process of amending  its  consolidated  federal  income tax returns for 1993 and
subsequent years.

The  Company  anticipates  that,  as a result of filing a  consolidated  federal
income tax return with  Carteret FSB, a total of  approximately  $170 million of
tax NOL's will be generated  from the Company's  tax basis in  Carteret/Carteret
FSB of which $158  million  are still  available  for future  use.  Based on the
Company's filing of its amended 1992  consolidated  federal income tax return to
include  the  federal  income tax  effects of  Carteret  FSB (the "1992  Amended
Return"),  approximately  $56 million of NOL's are  generated  for tax year 1992
which expire in 2007, with the remaining approximate $102 million of NOL's to be
generated,  based on  Carteret  FSB tax losses,  expiring no earlier  than 2008.
These NOL's would be available to offset future taxable  income,  in addition to
the NOL's as further detailed below.

Based upon the Company's  federal  income tax returns as filed from 1993 to 1999
(subject to IRS audit  adjustments),  and excluding the NOL's generated from the
Company's tax basis in  Carteret/Carteret  FSB, as noted above, at June 30, 2001
the Company has NOL's aggregating approximately $18 million, available to reduce
future  federal  taxable  income which expire if unused  beginning in 2009.  The
Company's  federal income tax returns for years subsequent to 1992 have not been
reviewed by the IRS.

The  utilization of NOL's are subject to limitations  under U.S.  federal income
tax laws. In addition,  the Company has  approximately $21 million of AMT credit
carryforwards ("AMT Credits"), which are not subject to expiration.

The  Company has filed  several  carryback  claims with the IRS (the  "Carryback
Claims"),  seeking refunds from the IRS of alternative minimum and other federal
income taxes paid by the Company in prior years plus  applicable  IRS  interest.
The Carryback  Claims are currently  being  reviewed by the IRS. The Company can
give no assurances  that the Carryback  Claims will be allowed by IRS, the final
amount of the refunds, if any, or when they might be received.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations,  which follows,  should be read in conjunction with the consolidated
financial statements and related notes, which are contained in Item 1, herein.

FINANCIAL CONDITION

The  Company's  assets  at  June  30,  2001  aggregated  $51,372,000  consisting
principally of cash and cash equivalents of $1,025,000 and investment securities
of $46,208,000. At June 30, 2001, the Company's liabilities,  including reserves
for  contingent  and  alleged  liabilities,  described  in  Part  II -  Item  1,
aggregated $10,053,000. Total stockholders equity was $41,319,000.

In  connection  with the  liquidation  of City  Investing  Company  ("City") the
Company,  among others,  contractually  assumed certain tax liabilities of City,
which, prior to September 1985, owned all the outstanding shares of Common Stock
of the Company.  Other liabilities were assumed by, among others, City Investing
Company Liquidating Trust (the "Trust").  For all periods through 1992, the only
issue that  remains in dispute  between City and the  Internal  Revenue  Service
("IRS")  is  with  respect  to  withholding  obligations  in  connection  with a
Netherlands  Antilles finance subsidiary of City (the "Withholding  Issue"). The
IRS contends that the  withholding of tax on interest  payments were due by City
in connection with City's Netherlands  Antilles finance subsidiary for the years
1979 through  1985 (the  "Withholding  Obligation").  On May 24, 2001 the United
States Tax Court (the "Tax Court") ruled in favor of City,  holding that City is
not liable for the payment of withholding taxes.

The Company's management, after consultation, with its accounting, tax and legal
advisors decided to reverse its Withholding  Obligation  reserve of $66,388,000.
This  decision is based upon (i) an analysis of the recent  favorable  ruling in
the Tax Court,  (ii) the Company's  case pending in the United  States  District
Court for the  Southern  District of New York against the Trust (the "City Trust
NY Action") (for further  information see Part II - Item 1 - Legal  Proceedings,
AmBase  Corporation v. City Investing  Company  Liquidating Trust et al. and the
Company's  Annual Report on Form 10-K for the year ending December 31, 2000) and
(iii) the $9,500,000,  plus interest that remains available in an escrow account
which was part of the Company's June 2000 settlement agreement with SF Holdings,
as further  discussed in the  Company's  Annual Report on Form 10-K for the year
ending December 31, 2000.

The $66,388,000  Withholding  Obligation  reserve  reversal is recorded as other
income in the  Company's  Consolidated  Statement of  Operations  for the second
quarter and six month periods,  ending June 30, 2001. The reserve  reversal also
resulted in a decrease in total liabilities and a corresponding  increase in the
Company's total stockholders' equity to an approximate positive $41,319,000 from
a negative $24,097,000 at December 31, 2000.

If (i) the IRS  were to  eventually  appeal  and  prevail  on this  issue in the
circuit court and (ii) the Company is found  primarily  liable in the City Trust
NY Action,  the Company,  could be liable for some or all of City's  Withholding
Obligation  plus  interest.  Such an amount could be in excess of the  Company's
financial  resources,  although  the  Company  believes  this  outcome is highly
unlikely.  The IRS has not yet indicated  whether it will appeal the Tax Court's
decision, but it has until August 21, 2001 to indicate its intention to file any
appeal.  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.

Notwithstanding  counsel's opinion, the recent favorable ruling by the Tax Court
in  City's  case,  and the City  Trust NY  Action  summarized  above,  it is not
possible at this time to determine the final disposition of this issue, when the
issues will be ultimately resolved, or their final financial effect.

For a further discussion, see Part II - Item 1 - Legal Proceedings, Dispute with
Internal Revenue Service over Withholding Obligations (Netherlands Antilles).

At June 30, 2001, the litigation and contingency reserves were $1,707,000. For a
discussion of alleged liabilities,  lawsuits and governmental  proceedings,  see
Part II - Item 1.

<PAGE>

The Company  has  certain  alleged  liabilities  and is a  defendant  in certain
lawsuits  and  governmental  proceedings.  Based  upon an  assessment  of  these
proceedings the Company  believes the ultimate  outcome of the proceedings  will
not have a material  adverse  effect on its  financial  condition and results of
operations.  The accompanying  consolidated  financial statements do not include
any adjustments that might result from an ultimate  unfavorable outcome of these
uncertainties.  Although the basis for the  calculation  of the  litigation  and
contingency  reserves  and the  Withholding  Obligation  reserve  are  regularly
reviewed by the Company's  management and outside legal counsel,  the assessment
of these reserves includes an exercise of judgment,  and is a matter of opinion.
For a discussion of alleged liabilities,  lawsuits and governmental proceedings,
see Part II - Item 1.

For  the six  months  ended  June  30,  2001,  cash of  $2,997,000  was  used by
operations, including the payment of prior year accruals and operating expenses,
partially  offset by the  receipt  of  interest  income.  The cash  needs of the
Company for the first six months of 2001 were principally  satisfied by interest
income received on investment securities and cash equivalents, and the Company's
current  financial  resources.  Management  believes  that  the  Company's  cash
resources are sufficient to continue operations for 2001.

For the six months  ended June 30,  2000,  cash of  $4,417,000  was  provided by
operations,  as a result of amounts  received in  connection  with the Company's
litigation  settlement  with SF  Holdings,  and the receipt of interest  income,
partially offset by the payment of prior year accruals and operating expenses.

The  Company  continues  to evaluate a number of  possible  acquisitions  and is
engaged in the management of its remaining assets and liabilities, including the
contingent and alleged liabilities,  as described above.  Extensive  discussions
and  negotiations  are ongoing  with  respect to certain of these  matters.  The
Company  intends to aggressively  contest all pending and threatened  litigation
and governmental proceedings,  as well as pursue all sources of contributions to
settlements.

In April 2001 the Company  through a  wholly-owned  subsidiary  has  purchased a
14,000  square feet office  building in  Greenwich,  CT for  approximately  $2.4
million.  Approximately  2,100  square  feet  is  used  by the  Company  for its
executive offices with the remaining square footage leased to unaffiliated third
parties.  There are no material  commitments for capital expenditures as of June
30, 2001. Inflation has had no material impact on the business and operations of
the Company.

<PAGE>

Results of Operations

Summarized financial information of the Company for the second quarter and six
months ended June 30 is as follows:

<TABLE>
<CAPTION>

                                                           Second Quarter                        Six Months
                                                        2001             2000              2001             2000
                                                        ====             ====              ====             ====

Operating expenses:
<S>                                              <C>              <C>               <C>              <C>

Compensation and benefits...................     $       826      $       884       $     1,710      $     1,823
Professional and outside services...........             326            1,069               391            1,359
Insurance...................................              10               23                28               37
Occupancy...................................              44               22                67               46
Other operating.............................              30               42                78               78
                                                    --------         --------          --------         --------
                                                       1,236            2,040             2,274            3,343
                                                    --------         --------          --------         --------
Operating loss..............................          (1,236)          (2,040)           (2,274)          (3,343)
                                                    --------         --------          --------         --------
Interest income.............................             782              676             1,313            1,258
Reversal of withholding obligation reserve..          66,388                -            66,388                -
Other income................................              56            8,308                99            8,358
                                                    --------         --------          --------         --------
Income before income taxes..................          65,990            6,944            65,526            6,273
Income tax expense..........................             (55)             (55)             (110)            (110)
                                                    --------         --------          --------         --------
Net income .................................     $    65,935     $      6,889       $    65,416      $     6,163
                                                       =====            =====             =====            =====
</TABLE>

The Company's main source of non-operating  revenue is interest income earned on
investment  securities and cash equivalents.  The Company's  management  expects
that operating  cash needs for the remainder of 2001 will be met  principally by
the  Company's  current  financial  resources  and the receipt of  non-operating
revenue  consisting of interest income earned on investment  securities and cash
equivalents.

The Company recorded net income of $65,935,000 or $1.43 per share and net income
$65,416,000  or $1.42 per share for the second quarter and six months ended June
30, 2001, respectively.  The second quarter and six month periods ended June 30,
2001  include  non-recurring  other  income  representing  the  reversal  of the
Withholding  Obligation  reserve as further  discussed in  Financial  Condition,
above. Excluding this other income the Company would have reported a net loss of
$453,000  and  $972,000,  for the second  quarter and six months  ended June 30,
2001, respectively.

The Company recorded net income of $6,889,000 or $0.15 per share, and $6,163,000
or $0.13 per share for the second  quarter and six months  ended June 30,  2000,
respectively.  The second  quarter  and six month  periods  ended June 30,  2000
include  $8,250,000  of other  income  representing  net  proceeds  received  in
connection with the Company's litigation settlement with SF Holdings.  Excluding
this other income the Company  would have  reported net loss of  $1,361,000  and
$2,087,000  for  the  second  quarter  and  six  months  ended  June  30,  2000,
respectively.

Compensation  and benefits  decreased to $826,000 and  $1,710,000  in the second
quarter and six months ended June 30, 2001, respectively, compared with $884,000
and $1,823,000 in the respective  2000 periods.  The decreases are primarily due
to a decrease  in  employment  levels and a related  decrease in the accrual for
2001 incentive compensation,  which is not guaranteed, as compared to prior year
accruals.

Professional and outside services were $326,000 in the second quarter ended June
30,  2001,  and  $391,000  in the six months  ended June 30,  2001,  compared to
$1,069,000 and $1,359,000 in the respective 2000 periods.  The decreased amounts
in the  2001  compared  with the  year  2000  periods  is due to a  decrease  in
Supervisory  Goodwill  litigation  expenses which were incurred in the year 2000
periods.

<PAGE>

Occupancy  expenses  increased to $44,000 and $67,000 in the second  quarter and
six months ended June 30, 2001,  respectively  compared with $22,000 and $46,000
in the respective 2000 periods principally due to the costs of office relocation
and costs  relating  to building  ownership.  Occupancy  expenses  have not been
reduced by tenant  reimbursements  or rental income which is included with other
income in the Consolidated Statement of Operations.

Interest  income in the  second  quarter  and six  months  ended  June 30,  2001
increased to $782,000 and $1,313,000 respectively,  from $676,000 and $1,258,000
in the respective 2000 periods.  The increases were primarily  attributable to a
higher  average level of  investments  held in 2001 compared with 2000 offset to
some extent by a decrease in yield in the comparable periods.

Other income of $56,000 and $99,000 for the second  quarter and six months ended
June 30, 2001  respectively,  is  attributable  to rental  income  earned by the
Company during the period of building ownership and the continued  collection of
a receivable previously considered uncollectible. Other income of $8,308,000 and
$8,358,000 in second quarter and six months ended June 30, 2000, respectively is
principally  attributable  to $8,250,000 of net proceeds  received in June 2000,
relating to the SF Holdings litigation settlement as noted above. The additional
other  income  in the  2000  periods  is due to the  continued  collection  of a
receivable previously considered uncollectible.

As further  discussed in Financial  Condition  above the second  quarter and six
month periods ended June 30, 2001 include a $66,388,000  Withholding  Obligation
reserve  reversal  which  is  reflected  as  other  income  in the  Consolidated
Statement of Operations.

The income tax  provisions of $55,000 and $110,000 in the second quarter and six
months  ended  June 30,  2001 and June 30,  2000,  respectively,  are  primarily
attributable to provisions for state taxes. Income taxes applicable to operating
income  (loss) are  generally  determined  by applying the  estimated  effective
annual  income tax rates to pretax income  (loss) for the  year-to-date  interim
period.  Income taxes applicable to unusual or infrequently  occurring items are
provided in the period in which such items occur.

<PAGE>

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company holds short-term investments as a source of liquidity. The Company's
interest rate sensitive investments at June 30, 2001 and December 31, 2000 with
maturity dates of less than one year consist of the following:

<TABLE>
<CAPTION>

                                                               2001                                2000
                                                   ===========================         =========================
                                                   Carrying              Fair             Carrying            Fair
                                                     Value               Value              Value            Value
(in thousands)                                     ---------          --------            ---------       --------

<S>                                                <C>               <C>                <C>              <C>

U.S. Treasury Bills.........................       $  46,208         $  46,219          $  46,547        $  46,595
                                                   =========         =========          =========        =========

Weighted average interest rate..............          3.64%                                 5.80%
                                                     ======                                ======
</TABLE>

The Company's current policy is to minimize the interest rate risk of its
short-term investments by investing in U.S. Treasury Bills with maturities of
less than one year. There were no significant changes in market exposures or the
manner in which interest rate risk is managed during the period.

STOCKHOLDER INQUIRIES

Stockholder inquiries, including requests for the following: (i) change of
address; (ii) replacement of lost stock certificates; (iii) Common Stock name
registration changes; (iv) Quarterly Reports on Form 10-Q; (v) Annual Reports on
Form 10-K; (vi) proxy material; and (vii) information regarding stock holdings,
should be directed to:

         American Stock Transfer and Trust Company
         40 Wall Street, 46th Floor
         New York, NY  10005
         Attention:  Shareholder Services
         (800) 937-5449 or (718) 921-8200

In addition, the Company's public reports, including Quarterly Reports on Form
10-Q, Annual Reports on Form 10-K and Proxy Statements, can be obtained through
the Securities and Exchange Commission EDGAR Database over the Internet, at
www.sec.gov.

<PAGE>

Part II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

The information  contained in Item 8 - Note 11 in AmBase's Annual Report on Form
10-K for the year ended  December 31, 2000 and in AmBase's  Quarterly  Report on
Form 10-Q for the  quarterly  period ending March 31, 2001 are  incorporated  by
reference  herein and the defined  terms set forth  below have the same  meaning
ascribed to them in those reports.  There have been no material  developments in
such legal proceedings, except as set forth below.

(a)  The  Company  is or  has  been a  defendant  in a  number  of  lawsuits  or
proceedings.

Marshall Manley v. AmBase  Corporation.  The Court has fixed November 5, 2001 as
the date for the new  trial.  Manley  seeks  reimbursement  of  certain  alleged
payments he made to the Trustee in the bankruptcy proceedings of the law firm of
Finley, Kumble, Wagner, Heine,  Underberg,  Manley & Casey of approximately $2.4
million plus interest  arguing that he served at such firm at the request of the
Company.

Dispute with Internal Revenue Service over Withholding Obligations  (Netherlands
Antilles).

On May 24, 2001 the Tax Court ruled in favor of City,  holding  that City is not
liable for the payment of withholding  taxes on interest  payments in connection
with City's  Netherlands  Antilles finance subsidiary for the years 1979 through
1985.

The IRS has not yet indicated  whether it will appeal the Tax Court's  decision,
but it has until August 21, 2001 to indicate  its  intention to file any appeal.
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. See Part I - Item 2 - Financial Condition for further information.

The  actions  described  above are in various  stages.  Although  the  Company's
management believes it is unlikely,  if the aggregate of any such judgments were
to exceed the resources  available,  these matters could have a material adverse
effect on the Company's  financial  condition and results of operations.  Due to
the nature of these  proceedings,  the  Company  and its  counsel  are unable to
express any opinion as to their probable outcome.

(b)    Other

AmBase  Corporation v. City Investing  Company  Liquidating  Trust, et al. - New
York Court  Action.  On May 30,  2001,  the Company  submitted a letter to Judge
Stanton, before whom the case is docketed,  acknowledging that the Tax Court had
ruled  against  the IRS on the issue of whether or not any  withholding  tax was
due,  and that this  decision,  once  finalized,  would  render the  declaratory
judgment  portion of the Company's  action  against the Trust moot. No assurance
can be given regarding the ultimate outcome of this litigation.

<PAGE>

Item 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS

Does not apply.

Item 3.       DEFAULTS UPON SENIOR SECURITIES

Does not apply.

Item 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Does not apply.

Item 5.       OTHER INFORMATION

At the Annual Meeting of Stockholders on June 1, 2001 the following proposals
were voted upon:

The following person nominated, was elected to be a director, as set forth
below:
                                          Number of Shares
                                    For                     Withheld
Michael L. Quinn                 41,724,221                  635,136
There were no broker non-votes.

Stockholders approved the appointment of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the year ending December 31, 2001.
The shares were voted as follows: 42,185,689 shares for and 139,269 against,
with 34,399 shares abstaining. There were no broker non-votes.

Item 6.       EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      None

(b)   Form 8-K

         Registrant filed two Current Reports on Form 8-K prior on the filing of
         this Form 10-Q for the quarter ended June 30, 2001 as follows:

                Date                           Event Reported
              May 24, 2001         Tax Court issues favorable ruling in
                                     Withholding Obligation Case
              May 30, 2001         Withholding Obligation Reserve Reversal

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

AMBASE CORPORATION


By    JOHN P. FERRARA
      Vice President, Chief Financial Officer and Controller
      (Principal Financial and
      Accounting Officer)

Date:  August 1, 2001

<PAGE>