Judge says no halting Stuy Town foreclosure

September 28, 2010 03:45PM

Stuyvesant Town

Junior creditors Pershing Square Capital Management and Winthrop Realty Trust lost their bid to stop the planned foreclosure sale of the Stuyvesant Town and Peter Cooper Village apartment complex, Crain’s reported. The New York State appeals court declined a request by Pershing and Winthrop to delay the Oct. 4 foreclosure planned by senior debt holders, according to court papers. William Ackman, who runs Pershing, said he will appeal. Pershing and Winthrop asked to stop the lender foreclosure last week. A lower court judge issued a preliminary injunction Sept. 16 blocking their foreclosure of the property unless they first pay senior creditors the $3.67 billion that they are owed under the first mortgage. CWCapital Asset Management, the special servicer for the senior mortgage, sued Pershing and Winthrop to stop their foreclosure plan, arguing that an agreement between the two groups of creditors prohibits Pershing and Winthrop from taking control of the property without paying the senior lenders. Pershing and Winthrop disagree and believe they have the right to foreclose on their collateral, which is separate from the lenders’ collateral. [Crain’s]