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 September 30, 2000

  [  ]  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.)

                      51 WEAVER STREET, BUILDING 2
                   GREENWICH, CONNECTICUT 06831-5155

         (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 September  30, 2000,  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
September 30, 2000
<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..........................................10

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
                  Third Quarter and Nine Months Ended September 30
                                   (Unaudited)
                        (in thousands, except per share data)

<TABLE>
<CAPTION>

<S>                                             <C>              <C>               <C>              <C>
                                                            Third Quarter                       Nine Months
                                                        2000             1999              2000             1999
                                                        ====             ====              ====             ====
Operating expenses:
Compensation and benefits...................     $       876      $       823       $     2,699      $     2,524
Professional and outside services...........             223              578             1,582            1,990
Insurance...................................              12               22                49               57
Occupancy...................................              23               27                69               78
Other operating.............................              37               32               115              116
                                                    --------         --------          --------         --------
                                                       1,171            1,482             4,514            4,765
                                                    --------         --------          --------         --------
Operating loss..............................          (1,171)          (1,482)           (4,514)          (4,765)
                                                    --------         --------          --------         --------
Interest income.............................             766              544             2,024            1,598
Other income................................              50               50             8,408              154
                                                    --------         --------          --------         --------
Income (loss) before income taxes...........            (355)            (888)            5,918           (3,013)
Income tax expense..........................             (44)             (46)             (154)            (169)
                                                    --------         --------          --------         --------
Net income (loss)...........................     $      (399)     $      (934)      $     5,764      $    (3,182)
                                                       =====            =====             =====            =====
Earnings per common share:
Net income (loss) - basic...................     $     (0.01)  $       (0.02)    $        0.12     $       (0.07)
Net income (loss) - assuming dilution.......           (0.01)          (0.02)             0.12             (0.07)
                                                       =====            =====             =====            =====

Average shares outstanding..................          46,209          44,534            46,202            44,534
                                                      ======          =======           ======            ======
</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>

                                                                                  September 30,       December 31,
                                                                                           2000               1999
                                                                                    (unaudited)
                                                                                       ========          =========
Assets
Cash and cash equivalents.........................................................   $      586         $    2,646
Investment securities - held to maturity (market
    value $50,920 and $43,259, respectively)......................................       50,919             43,260
Investment in SDG, Inc. at cost...................................................        1,250              1,250
Other assets......................................................................          472                522
                                                                                       --------           --------

Total assets......................................................................   $   53,227         $   47,678
                                                                                         ======             ======
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued liabilities..........................................   $     1,629        $    1,902
Supplemental retirement plan......................................................         5,911             5,545
Postretirement welfare benefits...................................................         1,079             1,178
Other liabilities.................................................................            97               106
Litigation and contingency reserves...............................................         1,630             1,983
Withholding issue reserve.........................................................        66,388            66,388
                                                                                       ---------           --------
Total liabilities.................................................................        76,734            77,102
                                                                                       ---------           --------
Commitments and contingencies.....................................................            -                  -
                                                                                       ---------           --------
Stockholders' equity:
Common stock......................................................................           463               455
Paid-in capital...................................................................       547,940           547,795
Accumulated deficit...............................................................      (571,263)         (577,027)
Treasury stock....................................................................          (647)             (647)
                                                                                       ---------          ---------
Total stockholders' equity........................................................       (23,507)          (29,424)
                                                                                       ---------          ---------

Total liabilities and stockholders' equity........................................   $   53,227         $   47,678
                                                                                         ======             ======
</TABLE>

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

<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                         Nine Months Ended September 30
                                   (Unaudited)
                                  (in thousands)


<TABLE>
<CAPTION>

<S>                                                                                   <C>                 <C>
                                                                                           2000               1999
                                                                                           ====               ====
Cash flows from operating activities:
Net income (loss).................................................................    $   5,764           $ (3,182)
Adjustments to reconcile net income (loss) to net cash provided (used) by operations:
Other assets......................................................................           38                 12
Accounts payable and accrued liabilities..........................................         (273)                56
Litigation and contingency reserves uses..........................................         (353)               (44)
Other liabilities.................................................................          256                200
Amortization of discount - investment securities..................................       (1,981)            (1,583)
Other, net........................................................................           14                 13
                                                                                       --------           --------
Net cash provided (used) by operating activities..................................        3,465             (4,528)
                                                                                       --------           --------
Cash flows from investing activities:
Maturities of investment securities - held to maturity............................       74,965             96,521
Purchases of investment securities - held to maturity.............................      (80,643)           (92,952)
Purchases of other investment securities..........................................            -               (250)
Other, net........................................................................            -                 10
                                                                                       --------           --------
Net cash provided (used) by investing activities..................................       (5,678)             3,329
                                                                                       --------           --------
Cash flows from financing activities:
Stock options exercised...........................................................          153                  -
                                                                                       --------           --------
Net cash provided by financing activities.........................................          153                  -
                                                                                       --------           --------
Net decrease in cash and cash equivalents.........................................       (2,060)            (1,199)
Cash and cash equivalents at beginning of period..................................        2,646              2,886
                                                                                       --------           --------
Cash and cash equivalents at end of period........................................    $     586            $ 1,687
                                                                                          =====              =====
Supplemental cash flow disclosures:
Income taxes paid.................................................................    $      75          $     164
                                                                                          =====              =====
</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 of normal recurring adjustments, necessary for a fair presentation 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 1999 consolidated  financial statements
to conform with the 2000  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 accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  Substantial  contingent and
alleged  liabilities  exist  against the Company  through  certain  lawsuits and
governmental proceedings;  see Part II - Item 1. These factors raise substantial
doubt about the Company's ability to continue as a going concern.  The financial
statements  do not  include  adjustments  to the  carrying  value of assets  and
liabilities,  which  might be  necessary  should the  Company  not  continue  in
operation.  In order to  continue on a long-term  basis,  the Company  must both
resolve its  contingent and alleged  liabilities by prevailing  upon or settling
these claims for less than the amounts claimed and generate profits by acquiring
existing  operations and/or by developing new operations.  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, 1999.

The  Company's  main  source of  non-operating  revenue  is  interest  earned on
investment  securities and cash equivalents.  The Company's  management  expects
that operating  cash needs for the remainder of 2000 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.

Note 2 - Legal Proceedings

The Company has  significant  alleged  liabilities and is a defendant in certain
lawsuits and governmental proceedings,  the ultimate outcome of which could have
a material adverse effect on its financial  condition and results of operations.
Because of the nature of the  contingent  and alleged  liabilities  described in
Part II - Item 1, and the inherent  difficulty in predicting  the outcome of the
litigation and governmental proceedings, management is unable to predict whether
the Company's recorded reserves will be adequate or its resources  sufficient to
satisfy  its  ultimate  obligations.  The  accompanying  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
these  uncertainties.  Although the basis for the  calculation of the litigation
and  contingency  reserves  and the  withholding  issue  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 September 30, 2000, the litigation and contingency  reserves,  other than for
the withholding issue, were $1,630,000. For a discussion of alleged liabilities,
lawsuits and governmental proceedings, see Part II - Item 1.

In  addition  to the  litigation  and  contingency  reserves,  the Company has a
withholding  issue reserve of  $66,388,000  at September 30, 2000. For a further
discussion,  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  and  information   regarding  the  Company's   litigation
settlement with Zurich SF Holdings, Inc.

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

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 September 30, 2000 and December 31,
1999 consist of the following:
<TABLE>
<CAPTION>

                                         September 30, 2000                            December 31, 1999
                             =======================================          ======================================
<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          $ 50,919        $  50,919     $ 50,920          $  43,260       $ 43,260     $   43,259
                               ======           ======       ======             ======         ======         ======
</TABLE>

The gross unrealized gains or (losses) on investment  securities was $1,000 gain
at September 30, 2000 and $1,000 loss at December 31, 1999.

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 September 30, 2000 and December 31, 1999.

<PAGE>

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

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 $29 million as of September 30, 2000 and $28 million as of
December  31,  1999,   arising   primarily   from  net  operating  loss  ("NOL")
carryforwards,  alternative  minimum tax 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.

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 not making the 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  carryforwards  will be  generated  from  the  Company's  tax  basis  in
Carteret/Carteret  FSB as tax losses are  incurred by Carteret FSB of which $158
million are still available for future use. Based on the Company's recent filing
of its  amended  1992  consolidated  federal  income tax  return to include  the
federal  income tax effects of Carteret  FSB,  approximately  $56 million of NOL
carryforwards  are  generated  for tax year 1992 which expire in 2007,  with the
remaining  approximate  $102  million  of  NOL  carryforwards  to be  generated,
expiring no earlier  than 2008.  These NOL  carryforwards  would be available to
offset future taxable income,  in addition to the NOL  carryforwards  as further
detailed below.

In June 1998,  the Company  paid  $12,700,000  to the IRS for tax and  estimated
interest to be applied to the Company's Fresh Start tax liability, which related
to a 1987 tax dispute  with the IRS.  Based on a Final  Stipulation  between the
Company and the IRS on the Fresh  Start  issue,  the Company  received a $36,000
refund of tax and  interest on the Fresh Start  issue.  In  connection  with the
Final Stipulation, the Company utilized approximately $29 million of NOL's.

Based upon the Company's  federal  income tax returns as filed from 1993 to 1999
(subject  to  IRS  audit  adjustments),  after  utilizing  $29  million  of  NOL
carryfowards in connection with Fresh Start;  and excluding the NOL carryfowards
generated from the Company's tax basis in Carteret/Carteret FSB, as noted above,
at   September   30,  2000  the  Company  has  NOL   carryforwards   aggregating
approximately  $24 million,  available to reduce future  federal  taxable income
which  expire if unused  beginning in 2008.  The  Company's  federal  income tax
returns for years subsequent to 1992 have not been reviewed by the IRS.

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

The utilization of certain  carryforwards  is subject to limitations  under U.S.
federal income tax laws. In addition,  the Company has approximately $21 million
of  alternative  minimum  tax  credit  carryforwards,  which are not  subject to
expiration.

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 September 30, 2000  aggregated  $53,227,000  consisting
principally of cash and cash  equivalents of $586,000 and investment  securities
of  $50,919,000.  At September 30, 2000,  the Company's  liabilities,  including
reserves for contingent and alleged liabilities, as further described in Part II
- Item 1, exceeded total recorded assets by $23,507,000.

In June 2000 the Company  entered  into a  settlement  agreement  with Zurich SF
Holdings LLC (f/k/a Reorganized Home Holdings, Inc.)("SF Holdings") settling the
disputed  claims  relating to the April 1999  complaint the Company filed in the
Supreme Court of New York.  Pursuant to the  settlement  agreement,  the Company
received,  among other things,  net proceeds of $8,250,000 from SF Holdings.  In
addition,  an  affiliate  of SF  Holdings  deposited  $9,500,000  in an interest
bearing escrow  account (the "Escrow  Account") to be used to pay 50% of certain
expenses and/or withholding obligations,  if any, up to the amount in the Escrow
Account in connection with the dispute with the Internal Revenue Service ("IRS")
over  the  Netherlands  Antilles   Withholding   Obligation  Issue.  Upon  final
resolution of the Netherlands Antilles Withholding Obligation Issue with the IRS
and payment of outstanding expenses, the residual of the Escrow Account, if any,
will be delivered to an affiliate of SF Holdings.

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 IRS is with respect to the
withholding  obligations  in  connection  with a  Netherlands  Antilles  finance
subsidiary of City (the "Withholding Issue").

With respect to the Withholding Issue, in connection with a Netherlands Antilles
finance  subsidiary  of City,  on May 11,  1995,  the IRS  issued  a  Notice  of
Deficiency for the  withholding  of tax on interest  payments for the years 1979
through 1985. In the Notice of  Deficiency,  the IRS contends that City's wholly
owned  Netherlands  Antilles  finance  subsidiary  should be disregarded for tax
purposes.  The  Company,  on  behalf  of City,  vigorously  contested  the IRS's
position in accordance with the IRS's internal  appeals  procedures.  In January
1992,  the National  Office of the IRS issued  technical  advice  supporting the
auditing agent's position.  In October 1992, the Company appealed this technical
advice to the National  Office.  The National Office advised the Company that it
expected to issue technical  advice  supporting the auditing  agent's  position,
whereupon  the Company  advised the IRS that it was  withdrawing  its  technical
advice request.
<PAGE>
                       AMBASE CORPORATION AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements (continued)

On June 30, 1995, the Company, on behalf of City, filed a petition in the United
States Tax Court ("Tax  Court")  contesting  the Notice of  Deficiency.  The IRS
filed its answer on August 23,  1995.  The  Company  filed a motion for  summary
judgment in its favor on February 13, 1996.  On April 17, 1996,  the IRS filed a
Notice of Objection to the Company's motion for summary judgment.  The Tax Court
requested,  and the Company filed,  on July 3, 1996, a reply to the IRS's Notice
of Objection.  On September 19, 1996, the Court denied the Company's  motion for
summary judgment without prejudice.  Based on the Tax Court's examination of the
record and the status of the discovery  process,  the Tax Court  concluded  that
summary adjudication at that time was inappropriate.  The Tax Court directed the
parties to engage in full and complete discovery as expeditiously as possible. A
trial was held in this case on March 24,  1997,  after which the Judge asked the
IRS and the Company to submit post-trial briefs, which were submitted to the Tax
Court in August  1997.  If the IRS were to prevail on this  issue,  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  for this issue is whether  pursuant  to the
contractual  arrangement  between the Company and City, the Company is primarily
liable for the withholding obligation and interest. See Part II - Item 1 - Legal
Proceedings,  AmBase Corporation v. City Investing Company  Liquidating Trust et
al. for further information.

In a case dealing with a similar withholding issue, the Tax Court ruled in favor
of the taxpayer,  Northern Indiana Public Service Co. ("Northern  Indiana"),  in
November 1995. The Tax Court rejected the IRS's contention that interest paid to
Northern  Indiana's foreign  subsidiary was subject to United States withholding
of tax. The IRS appealed this decision  (Northern  Indiana Public Service Co. v.
Commissioner)  to the United  States  Court of Appeals for the 7th Circuit  (the
"Appeals Court"). In June 1997 the Appeals Court affirmed the Tax Court's ruling
in favor of  Northern  Indiana.  Although  the  Appeals  Court  decision  in the
Northern Indiana case could be beneficial to the case involving City , it is not
necessarily  indicative  of the ultimate  result of the final  settlement of the
Netherlands Antilles issue involving City.

Based on an evaluation of the IRS's contention,  counsel has advised the Company
that, although the outcome in litigation can by no means be assured, the Company
has a very strong case and should prevail. Notwithstanding counsel's opinion and
the Tax Court's ruling in the Northern  Indiana case, it is not possible at this
time to determine the final  disposition of this issue,  when the issues will be
resolved,  or their final financial effect. A final disposition of this issue in
the  Company's  favor  would have a material  positive  effect on the  Company's
Consolidated Statement of Operations and Financial Condition.

The Company has a  Withholding  Issue  reserve of  $66,388,000  at September 30,
2000.  For a  further  discussion,  see  Part II - Item 1 -  Legal  Proceedings,
Dispute with Internal Revenue Service over Withholding Obligations  (Netherlands
Antilles).

At September 30, 2000, the litigation and contingency  reserves,  other than for
the Withholding Issue, were $1,630,000. For a discussion of alleged liabilities,
lawsuits and governmental proceedings, see Part II - Item 1.

The Company has  significant  alleged  liabilities and is a defendant in certain
lawsuits and governmental proceedings,  the ultimate outcome of which could have
a material adverse effect on its financial  condition and results of operations.
Because of the nature of the contingent and alleged liabilities and the inherent
difficulty  in  predicting  the  outcome  of  the  litigation  and  governmental
proceedings,  management  is unable to predict  whether the  Company's  recorded
reserves  will be adequate or its  resources  sufficient to satisfy its ultimate
obligations.  The accompanying  consolidated financial statements do not include
any  adjustments  that might  result  from the  outcome of these  uncertainties.
Although  the  basis  for the  calculation  of the  litigation  and  contingency
reserves  and the  Withholding  Issue  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.

The cash needs of the Company for the first nine months of 2000 were principally
satisfied by proceeds  received in  connection  with the SF Holdings  litigation
settlement  further  described  above,  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 2000.

For the nine months ended September 30, 2000, cash of $3,465,000 was provided by
operations,  as a result of amounts  received in connection with the SF Holdings
litigation  settlement  further  discussed  above,  and the  receipt of interest
income,  partially  offset by the payment of prior year  accruals and  operating
expenses.

For the nine months ended  September 30, 1999,  cash of  $4,528,000  was used by
operations, including the payment of prior year accruals and operating expenses,
partially offset by the receipt of interest income.

<PAGE>

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 pursuing all sources of contributions
to settlements. In order to continue on a long-term basis, the Company must both
resolve its  contingent and alleged  liabilities by prevailing  upon or settling
these  claims  for less  than the  amounts  claimed,  and  generate  profits  by
acquiring existing operations and/or by developing new operations.

There were no material  commitments for capital expenditures as of September 30,
2000.

Results of Operations

Summarized financial information of the Company for the third quarter and nine
months ended September 30 is as follows:
<TABLE>
<CAPTION>

                                                           Third Quarter                       Nine Months
                                                        2000             1999              2000             1999
                                                        ====             ====              ====             ====
<S>                                              <C>               <C>             <C>              <C>
Operating expenses:
Compensation and benefits...................     $       876       $      823       $     2,699      $     2,524
Professional and outside services...........             223              578             1,582            1,990
Insurance...................................              12               22                49               57
Occupancy...................................              23               27                69               78
Other operating.............................              37               32               115              116
                                                    --------         --------          --------         --------
                                                       1,171            1,482             4,514            4,765
                                                    --------         --------          --------         --------
Operating loss..............................          (1,171)          (1,482)           (4,514)          (4,765)
                                                    --------         --------          --------         --------
Interest income.............................             766              544             2,024            1,598
Other income................................              50               50             8,408              154
                                                    --------         --------          --------         --------
Income (loss) before income taxes...........            (355)            (888)            5,918           (3,013)
Income tax expense..........................             (44)             (46)             (154)            (169)
                                                    --------         --------          --------         --------
Net income (loss)...........................     $      (399)     $      (934)      $     5,764      $    (3,182)
                                                       =====            =====             =====            =====
</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 2000 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 a net loss of $399,000 or $0.01 per share,  and net income
of  $5,764,000  or $0.12 per share for the third  quarter and nine months  ended
September 30, 2000, respectively. The nine month period ended September 30, 2000
includes  $8,250,000  of other  income  principally  representing  net  proceeds
received in connection with the Company's  litigation  settlement with Zurich SF
Holdings LLC, ("SF  Holdings")  further  described  below.  Excluding this other
income the Company  would have  reported a net loss of  $2,486,000  for the nine
months ended  September  30, 2000.  For the third  quarter and nine months ended
September  30,  1999 the  Company  recorded a net loss of  $934,000 or $0.02 per
share, and $3,182,000 or $0.07 per share, respectively.

Compensation  and benefits  increased to $876,000  and  $2,699,000  in the third
quarter and nine months ended  September 30, 2000,  respectively,  compared with
$823,000 and  $2,524,000  in the  respective  1999  periods.  The  increases are
primarily  due to an increase in the  accrual for 2000  incentive  compensation,
which is not guaranteed, as compared to prior year accruals.

Professional  and outside  services  were  $223,000 in the third  quarter  ended
September 30, 2000, and $1,582,000 in the nine months ended  September 30, 2000,
compared to $578,000 and $1,990,000 in the respective 1999 periods.  The amounts
in the 2000  periods  are  comprised  of expenses  relating  to the  Supervisory
Goodwill  litigation and expenses relating to the litigation  settlement with SF
Holdings.  The amounts in the 1999 periods are principally comprised of expenses
relating to the Supervisory Goodwill litigation.
<PAGE>

Interest  income in the third  quarter and nine months ended  September 30, 2000
increased to $766,000 and $2,024,000, respectively, from $544,000 and $1,598,000
in the respective 1999 periods. The increases were primarily  attributable to an
increased yield on investments and a higher average level of investments held in
2000 compared with 1999.

The  additional  other  income in the 2000  periods and the other income for the
third  quarter  and nine  months  ended  September  30,  1999  respectively,  is
principally  due to the  continued  collection  by an inactive  subsidiary  of a
receivable previously considered uncollectible.

The income tax  provisions of $44,000 and $154,000 in the third quarter and nine
months ended  September 30, 2000  respectively,  and $46,000 and $169,000 in the
third  quarter and nine months  ended  September  30,  1999,  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.

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 September 30, 2000 and December 31, 1999
with maturity dates of less than one year consist of the following:
<TABLE>
<CAPTION>

                                                              2000                                1999
                                                   ========================              ======================
                                                   Carrying           Fair           Carrying             Fair
                                                     Value            Value            Value              Value
(in thousands)                                     --------           -----           --------          --------
<S>                                               <C>             <C>              <C>               <C>


U.S. Treasury Bills.........................      $  50,919       $  50,920        $   43,260        $   43,259
                                                     =======         ======            ======            ======

Weighted average interest rate..............         5.71 %                             4.81%
                                                    =======                            ======
</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 year.

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>

RECENT DEVELOPMENTS

In November 2000, the Board of Directors  approved an amendment to the Company's
existing  Shareholder  Rights Plan (the "Plan") to extend the expiration date of
the Plan to February 10, 2006 from February 10, 2001.

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, 1999 and in AmBase's  Quarterly  Report on
Form 10-Q for the  quarterly  periods ended March 31, 2000 and June 30, 2000 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 proceed-
    ings.

The  actions  against  the  Company  are in various  stages.  Nevertheless,  the
allegations  and  claims  are  material  and,  if  successful,  could  result in
substantial  judgments  against the Company.  To the extent the aggregate of any
such judgments were to exceed the resources available,  these matters would 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)  Supervisory Goodwill Litigation

On October 2, 2000,  Senior  Judge  Loren  Smith of the Court of Federal  Claims
heard oral  arguments in the  Company's  supervisory  goodwill  case against the
United States  government.  The court heard arguments both as to the contractual
liability of the United States to Carteret Savings Bank, and as to the Company's
claim against the United States under the Takings Clause of the Fifth Amendment.

(c)  Other

AmBase  Corporation  v. City  Investing  Company  Liquidating  Trust,  et al. On
September 29, 2000,  the Trust moved to dismiss the  Company's  complaint on the
grounds  that it fails to state a claim for which  relief can be granted and the
Company's  claims are barred by the statute of limitations.  The Company intends
to file a brief in response to the Trust's  motion.  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

Does not apply.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

       4. Rights Agreement dated as of February 10, 1986 between the Company and
          American  Stock  Transfer & Trust  Company (as amended March 24, 1989,
          November 20, 1990,  February 12, 1991,  October 15, 1993,  February 1,
          1996 and November 1, 2000).

      27.  Financial Data Schedule (submitted to SEC only in electronic format)

(b)   Form 8-K

      None

<PAGE>

                                   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




------------------------
/s/John P. Ferrara
   Vice President, Chief Financial Officer and Controller
   (Principal Financial and
    Accounting Officer)

Date:  November 3, 2000