The Real Deal New York

Stuy Town debt holder moves to block foreclosure

February 25, 2010 01:03PM

A hedge fund that owns much of the debt on distressed mega complex Stuyvesant Town and Peter Cooper Village filed papers in court this week to intervene in its already complicated foreclosure proceedings. The company, New Jersey-based Appaloosa Management, is objecting to the “irrational” and “imprudent” foreclosure action filed earlier this month by CW Capital Management. Foreclosure could cost debt holders up to $200 million in transfer taxes, and the company has said CW Capital should have pushed for former owners Tishman Speyer Properties and BlackRock Realty to go to Bankruptcy Court, instead. Tishman Speyer and BlackRock defaulted on their $3 billion mortgage at Stuyvesant Town in January and have since agreed to hand over the keys. Appaloosa owns more than $750 million in mortgages on the property. The company said it remains unclear whether it will be responsible, along with other debt holders, for more than $200 million in rent overcharges as a result of last year’s rent-stabilization ruling on 4,400 apartments there. [NYT]

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