Bondholders plan Oct. 4 Stuyvesant foreclosure sale
Trade the News
Sunday September 05, 2010 12:52:20 AM GMT
* Bondholders set Oct. 4 foreclosure auction date
* Foreclosure will have to wait for judge's decision
NEW YORK, Sept 5 (Reuters) - A representative of the bondholders of a $3 billion mortgage on a vast Manhattan apartment complex has set Oct. 4 as the date to sell Stuyvesant Town and Peter Cooper Village in a foreclosure auction.
The representative, CWCapital, advertised the foreclosure auction in Sunday's edition of The New York Times.
But the foreclosure on the properties, which consist of 56 buildings on 80 acres on the east side of lower Manhattan, will have to wait until a state court judge rules on two competing plans by creditors.
The property foreclosure was filed in a federal District Court in Manhattan. But on Thursday, a New York state court judge blocked that auction and another from a different creditor who wants to take control of the property by foreclosing on the company that owns it.
The bondholders are battling a joint venture led by hedge fund manager William Ackman's Pershing Square Capital Management LP, which seeks to foreclose on the equity of the owner PCV ST.
The property became a textbook case of excessive lending and spending on U.S. commercial real estate during the boom of 2005 through 2006. A group led by Tishman-Speyer Properties paid $5.4 billion for the two complexes and created a company, PVC ST, to do the deal. But earlier this year the company defaulted on its loan payments. The property is thought to be worth less than half that sum.
Pershing and Winthrop Realty Trust, which bought a defaulted $300 million junior loan for 15 cents on the dollar, had sought to foreclose on PCV ST, the company that owned the property, by Sept. 8. Winthrop originally owned the junior loan portion. That loan is secured by shares in the owner and not the property, while the mortgage is secured by the property.
The bondholders are now owed $3.66 billion, which is the mortgage plus interest and fees.
The case is Bank of America NA et al v. PSW NYC LLC, New York State Supreme Court, New York County, No. 651293/2010. (Reporting by Ilaina Jonas, editing by Martin Golan)
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