Stuytown Sale

Any thoughts about a possible StuyTown/PCV condo/coop conversion? We haven't heard anything in a while. But, the following article was posted recently pertaining to the complaint filed against CW? Looks like the suit will be heard on the State level in NY. Maybe some progress can be made toward a sale, hopefully soon. It will be interesting to see how this goes... See attached for the full article... [more]

Any thoughts about a possible StuyTown/PCV condo/coop conversion? We haven't heard anything in a while. But, the following article was posted recently pertaining to the complaint filed against CW? Looks like the suit will be heard on the State level in NY. Maybe some progress can be made toward a sale, hopefully soon. It will be interesting to see how this goes... See attached for the full article - Stuy-Town Juniors Kick $5.4B Loan Fight To State Court Share us on: By Andrew Scurria Law360, New York (January 13, 2015, 2:11 PM ET) -- A New York federal judge ordered Monday that a state court hear a lawsuit claiming CWCapital Asset Management LLC improperly seized the $5.4 billion Stuyvesant Town-Peter Cooper Village project following a debt default, a victory for junior lenders that say they were left out of the money. U.S. District Judge Alison Nathan remanded the litigation to the New York state court where it was originally filed, finding no claim that would rise and fall based on the application of a federal statute — a prerequisite for the CWCapital affiliate defendants to keep the case in a friendlier federal jurisdiction. CWCapital, which has managed Stuy Town since 2011, canceled a planned foreclosure auction and took title to the residential development back in June after a $3 billion mortgage default and was sued the following month by several funds controlled by Centerbridge Partners LP that hold lower-ranking mezzanine debt. “The defendants are unable to meet the threshold requirement of demonstrating that a federal question is necessarily raised by any of plaintiffs' claims,” Judge Nathan said. Representing holders of the Stuy Town’s defaulted senior debt, CWCapital took control through a so-called deed in lieu of foreclosure transaction from Tishman Speyer Properties LP and BlackRock Inc., which walked away from the development in New York’s highest-profile failure from the recession-era real estate bust. Stuy Town came about through a multitiered $5.4 billion financing that closed in 2006. Comprised of a senior mortgage loan that was packaged into securities and $1.4 billion in junior debt, it remains to this day the single largest real estate transaction in U.S. history. The clash between mortgage creditors and junior stakeholders has clouded the future ownership of the property and its 4,300 rent-stabilized apartment units. Tishman had planned to raise the rents at the complex's regulated units, which led to a contentious class action that ultimately thwarted that plan. Stuyvesant Town became the icon of a historic rent regulation fight culminating in a landmark $173 million settlement with tenants that ensured continued rent stabilization through 2020. The junior creditors’ complaint centers on an intercreditor agreement that lays out the rights of each constituency and allegedly forbids the deed in lieu transaction. The deed in lieu deal transferred the property to several special purpose entities owned by CWCapital, allegedly with the goal of keeping the property for itself and wiping out its mezzanine debts. The plaintiffs are after the “excess value” of the property — whatever proceeds are left over from its eventual sale after the mortgage debt is satisfied. The plaintiffs say that CWC improperly inflated the interest rate they were owed to calculate a total senior debt of $4.4 billion. In reality, only $3.45 billion actually remains outstanding, according to the complaint filed in New York Supreme Court and removed by CWCapital in August. Critically, the plaintiffs say they are in the money even if CWCapital’s calculation of the default interest rate is correct, Judge Nathan said. With the property’s worth estimated at $5 billion, they see $1.5 billion in excess value. Judge Nathan held that the claims therefore did not turn on the federal law governing post-judgment interest, the only dispositive federal question cited by CWCapital to justify keeping the case out of state court. “This is plainly wrong,” the judge said. “At multiple points in their complaint the plaintiffs explain that they still stand to recover a very substantial sum of damages even if their interpretation ... is wrong.” The suit accused CWCapital of a “continued pattern of misconduct” designed to take more than $1 billion away from subordinated creditors. The senior creditors hold a $3.6 billlion foreclosure judgment from 2010, which is planned to be satisfied out of the property’s eventual sale. The defendants acquired the top-ranking slices of the mezzanine debt shortly after the foreclosure judgment, which the junior group says violated its intercreditor agreement. A CWCapital representative did not immediately respond to a request for comment. The plaintiffs are represented by Michael B. Carlinsky, Susheel Kirpalani, Scott C. Shelley, John H. Chun and Robert S. Trisotto of Quinn Emanuel Urquhart & Sullivan LLP and Scott Mollen of Herrick Feinstein LLP. The defendants are represented by Gregory A. Cross, Colleen M. Mallon, Michael Schatzow and Michael C. Hartmere of Venable LLP. The case is PCVST Mezzco 4 LLC et al. v. Wachovia Bank Commercial Mortgage Trust 2007-C30 et al., case number 1:14-cv-06023, in the U.S. District of New York for the Southern District of New York. — Editing by Ben Guilfoy. [less]