Court suspends Stuy Town foreclosure

August 19, 2010 06:00PM

Stuyvesant Town

A joint venture between Pershing Square Capital Management and Winthrop Realty Services will not be allowed to foreclose on Stuyvesant Town and Peter Cooper Village next week, Crain’s reported. Today’s ruling comes one day after Bank of America and U.S. Bancorp, trustees for the senior lenders of the residential complex, sued to block the joint venture from foreclosing on the 110-building property. The suit charged that the partnership breached terms of the 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. The court has scheduled a hearing for Sept. 2 so both parties can present their cases, according to CWCapital Asset Management, the special servicer that represents the interests of the first mortgage’s holders. CWCapital is also a plaintiff in the suit, which was filed yesterday in the New York state Supreme Court in Manhattan. [Crain’s]