The New York Supreme Court issued a temporary stay today against a joint venture between Pershing Square Capital Management and Winthrop Realty Services that wanted to foreclose next week on the Stuyvesant Town/Peter Cooper Village residential complex east of First Avenue between 14th and 23rd Streets, according to an article at crainsny.com by Amanda Fung.
The ruling was sought by CW Capital Asset management, the special service that represents the interests of the holders of the first mortgage on the complex. The article said that CW Capital issued a statement today that said it was seeking "to ensure that certain provisions and rights of the $3 billion first mortgage lender with regard to the mezzanine debt holders are enforced."
The suit charged that the partnership breached terms of the inter-creditor agreement for the property, which outlines how the loan will be paid by all the different creditors.
The banks' suit claims that Pershing and Winthrop will file for bankruptcy once they take control of the property and will then avoid paying the mortgage.
"CWCapital remains committed to continuing its close communication with tenant advisors, city officials and others to ensure the stability of this community, which includes the expeditious resolution of the issues currently at hand," the firm said in its statement.
"Last week, in a move to takeover Stuy Town, Pershing and Winthrop snapped up a $300 million mezzanine loan, a key piece of the complex's debt that stands between the owner's equity and the first mortgage. They bought their stake for a mere $45 million, or 15 cents on the dollar. With that in hand, they quickly scheduled a foreclosure auction for Aug. 25, which they hoped to win," the article said.
In response to the court decision, it continued, Pershing and Winthrop said, "The court took no adverse action today, notwithstanding CWCapital's mischaracterizations to the contrary. We remain confident in our right to acquire control of the property owner while preserving the first mortgage lender's collateral."
The court today scheduled a September 2 hearing for both sides to present their cases.
The ruling was sought by CW Capital Asset management, the special service that represents the interests of the holders of the first mortgage on the complex. The article said that CW Capital issued a statement today that said it was seeking "to ensure that certain provisions and rights of the $3 billion first mortgage lender with regard to the mezzanine debt holders are enforced."
The suit charged that the partnership breached terms of the inter-creditor agreement for the property, which outlines how the loan will be paid by all the different creditors.
The banks' suit claims that Pershing and Winthrop will file for bankruptcy once they take control of the property and will then avoid paying the mortgage.
"CWCapital remains committed to continuing its close communication with tenant advisors, city officials and others to ensure the stability of this community, which includes the expeditious resolution of the issues currently at hand," the firm said in its statement.
"Last week, in a move to takeover Stuy Town, Pershing and Winthrop snapped up a $300 million mezzanine loan, a key piece of the complex's debt that stands between the owner's equity and the first mortgage. They bought their stake for a mere $45 million, or 15 cents on the dollar. With that in hand, they quickly scheduled a foreclosure auction for Aug. 25, which they hoped to win," the article said.
In response to the court decision, it continued, Pershing and Winthrop said, "The court took no adverse action today, notwithstanding CWCapital's mischaracterizations to the contrary. We remain confident in our right to acquire control of the property owner while preserving the first mortgage lender's collateral."
The court today scheduled a September 2 hearing for both sides to present their cases.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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