Fate of Stuy Town still up in the air

September 02, 2010 03:30PM

Stuyvesant Town

A New York State Supreme Court judge postponed ruling today on whether a joint venture can foreclose on Stuyvesant Town and Peter Cooper Village. Judge Richard Lowe indicated he would likely rule later this month in the case over the 11,000-unit East Side complex, Crain’s reported. Over the summer, a joint venture between hedge fund manager Bill Ackman’s Pershing Square Capital Management and Winthrop Realty Services acquired a $300 million mezzanine loan for just $45 million, with plans to foreclose on the property in an auction Aug. 25. However, Bank of America and U.S. Bancorp, acting as trustees for the complex’s senior lenders, sued to block the foreclosure, alleging that the venture was breaching terms of the inter-creditor agreement, The senior lenders, who hold the $3 billion mortgage on the complex, also want to foreclose on the property. Earlier this year, a Tishman Speyer-led partnership defaulted on the mortgage. Since then, special servicer CW Capital, representing the interests of the senior lenders, has been working to ensure the property is maintained and preparing for an orderly foreclosure. [Crain’s]