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New York City's Stuyvesant Town Foreclosure Wins Federal Court Approval
Stuyvesant Town-Peter Cooper Village, Manhattan’s largest apartment complex, can be foreclosed on and sold at auction, a federal court ruled.
The 80-acre property, home to more than 11,000 housing units, may be sold in one or two pieces, according to documents filed yesterday in U.S. District Court in Manhattan.
“This was a natural and expected next step, and one that is consistent with tenants’ interests,” said New York City Councilman Daniel Garodnick, a resident of Peter Cooper Village. “Anything which avoids a prolonged legal battle is a good step.”
Tishman Speyer Properties LP and BlackRock Inc. bought the developments for $5.4 billion in 2006 near the top of the U.S. real estate boom. The owners missed a payment on the $3 billion senior mortgage in January after failing to raise rents as fast as anticipated. The companies have been seeking to turn the complex over to creditors ever since.
Garodnick and other tenants are trying to piece together a plan that would allow them to buy the complex and turn some units into co-operative apartments or condominiums that residents could purchase. The group is seeking investment partners, Garodnick said.
Bank of America Corp. and special loan servicer CWCapital Asset Management LLC sought the foreclosure on behalf of senior creditors. Debt from the senior mortgage, which was securitized and sold to investors from New York to Singapore, ballooned to $3.66 billion through April 22, according to yesterday’s decision by Judge Alvin Hellerstein.
$100 Million Deposit
Buyers interested in bidding for Stuyvesant Town-Peter Cooper Village must put up a $100 million deposit, Hellerstein said.
“The value is unpredictable in so many ways,” Richard Fries, a New York-based partner at the law firm Bingham McCutchen LLP, said in an e-mail. “This is the most fascinating and highest profile -- not to mention largest -- defaulted real estate property I have ever seen and I have seen many.”
Fries heads the firm’s distressed real estate practice.
Elizabeth Orcutt, a CW spokeswoman, didn’t immediately return voicemail and e-mailed messages seeking comment. Bud Perrone, a spokesman for Tishman Speyer, declined to comment.
The case is Bank of America N.A. v. PCV ST Owner LP, 10- 01178, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Oshrat Carmiel in New York at ocarmiel1@bloomberg.net
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