Quantcast

The DNAinfo archives brought to you by WNYC.
Read the press release here.

Stuyvesant Town Residents Watch and Wait as Lawyers Wrangle Over Foreclosure

By Patrick Hedlund | September 23, 2010 7:13pm
The Stuyvesant Town and Peter Cooper Village complex sits on 80 acres on Manhattan's East Side.
The Stuyvesant Town and Peter Cooper Village complex sits on 80 acres on Manhattan's East Side.
View Full Caption
Mario Tama/Getty Images

By Patrick Hedlund

DNAinfo News Editor

STUYVESANT TOWN — The planned foreclosure of Stuyvesant Town and Peter Cooper Village by the complex's majority stakeholder will move forward in the coming weeks unless a junior investor succeeds in a last-ditch effort to block the move.

Last week, a Manhattan Supreme Court judge ruled that a joint venture led by hedge-funder William Ackman — which purchased a key piece of secondary debt on the 11,227-apartment property last month — could not move ahead with a foreclosure proceeding, clearing the way for senior creditor CW Capital to pursue its own planned Oct. 4 foreclosure.

However, attorneys for Ackman's partnership, Pershing Square Winthrop, filed a request with an appeals court this week seeking to stay the foreclosure so that its investment in the complex would not be lost.

"If the senior lenders go forward with a foreclosure, then our economic interest would be wiped out," said Edward Weisfelner, a lawyer for Pershing Square Winthrop. "The point we're making to the appellate court is look, this is only round one."

The heart of the disagreement between the two investors is the interpretation of the agreement between the complex's creditors. CW Capital argues that the agreement stipulates that Pershing Square Winthrop must pay the approximate $3.5 billion owed on the complex's first mortgage before it can foreclose.

Weisfelner challenged that assertion, arguing that his client is precluded from paying the full amount because CW Capital is seeking foreclosure.

An attorney for CW capital did not immediately return a request for comment.

Weisfelner added that a decision on the stay will be determined by Sept. 29.

Tenants and representatives of the sprawling East Side complex have maintained throughout the legal wrangling that they will work with any party seeking to convert the property for residential ownership, as long as the tenants' desires are met.

"We are pleased that CW Capital has expressed support of those goals — giving a choice to buy or continue as renters, preserving long-term affordability, protecting the open spaces from development, ensuring quality maintenance and keeping the community united as a whole," City Councilman Dan Garodnick said in a statement. 

Garodnick, a lifelong resident of Peter Cooper Village who represents the complex, added that "when all the litigation is done, any restructuring must conform to these core goals."

Al Doyle, president of the Stuyvesant Town-Peter Cooper Village Tenants Association, echoed the councilman's remarks that any future plan for the complex must first pass muster with residents.

"That is the overarching principle that we are united around," he said in a statement, "and so far, we have the attention of everyone interested in this property."