Stuy Town tenant settlement OK’d by court

April 10, 2013 04:00PM

A New York state judge today approved a $68.8 million settlement in the Stuyvesant Town-Peter Cooper Village tenant class action, in which residents alleged that the complex’s owners had improperly deregulated rent-stabilized units, according to Wolf Haldenstein Adler Freeman & Herz LLP, co-lead counsel for the plaintiffs.

The ruling brings an end to the long-running lawsuit at the 11,000-unit complex, and paves the way for roughly 27,500 tenants to receive payments spanning from $150 to more than $100,000 for rent paid during a nearly nine-year period.

The deal, worth an estimated $173 million with other rent breaks factored in, marks the largest tenant settlement in the nation, Wolf Haldenstein said.

The residents, led by tenant Amy Roberts, filed the class action in 2007, claiming that insurer MetLife and Tishman Speyer, which had owned the complex at different times before 2010, deregulated the units while taking J-51 tax benefits. A judge ruled that this was improper, and the decision was later upheld on appeal.

The settlement puts aside $68.8 million to compensate members of the class for the rent payments. CWCapital, a special servicer that now controls the property, will cover $58.3 million, while MetLife will contribute $10.5 million.

Tenants will get “refunds equaling at least 100 percent and, most likely up to 110 percent, of their overcharges,” said Daniel Kasner, an attorney for the plaintiffs, in the release, adding that most or all of the attorneys’ fees are slated to be paid from excess funds.

The settlement also ensures that 4,311 of the formerly decontrolled units will remain rent stabilized through June 2020, when the J-51 benefits expire.

Two Stuy Town residents previously asked a judge to block the settlement, citing high legal fees and the fact that some residents would receive only $150 from the deal. —Zachary Kussin