New York StateCourt of Appeals ruling against the owners, the $3-billionmortgage on the Peter Cooper Village/Stuyvesant Town apartmentcomplex has gone into technical default. The 11,227-unit complex'sowners, a joint venture of Tishman Speyer Properties and BlackRockRealty, said Friday that they had missed January's $16-millionpayment on the loan, which went into specialservicing in November.

Now that the other shoe has dropped, questions abound as to whathappens next. The answers may be a long time in coming: as a letterto the complex's tenants from City Council Member DanielGarodnick—himself a Stuy-Town resident—pointed out, the defaulttriggers "a number of events, most of which are strictly legal innature." A statement from the Peter Cooper Village/Stuyvesant TownTenants Association calls the default "the first step in what willlikely be a long legal process."

Untangling and restructuring the loan is likely to take months,and there are numerous legal issues pertaining to the court's Oct.22, 2009 ruling, which found that the complex's owners illegallydecontrolled rent-stabilized apartments while also receiving J-51tax benefits to perform renovations. Moreover, the $3-billionmortgage is only one layer of financing on the complex; there arealso $1.4 billion in mezzanine loans as well as about $1 billion inequity invested by the JV and others.