NEW YORK CITY-CWCapital Asset Management’s foreclosure auction on Peter Cooper Village/Stuyvesant Town will go ahead as scheduled this coming Monday, following a New York court’s refusal to grant a stay of the auction. The senior mezzanine debtholders on the 80-acre Manhattan apartment complex, a partnership of William Ackman’s Pershing Square Capital Management and Winthrop Realty Trust, say in a statement that they’ll continue to fight but acknowledge that they may be frozen out of the process.

“We’re going to go ahead on Monday,” Gregory Cross, a Venable LLP partner who represented CWCapital in court, told Reuters. The Pershing/Winthrop partnership known as PSW NYC LLC, he said, “had no more ability to enjoin our foreclosure than the Red Sox have to stop the Yankees from signing free agents.” Calls by GlobeSt.com to Venable and to CWCapital were not returned by deadline.

Tuesday’s decision by the Appellate Division of New York Supreme Court “is not a ruling on the merits of the appeal from the Trial Court’s Sept. 16 injunction, which PSW intends to vigorously pursue,” PSW says in a statement. The parrnership adds that it will continue to pursue its claims that the mortgage lenders have “improperly interfered with PSW’s efforts to foreclose on the equity interests that serve as collateral for PSW’s $300-million of mezzanine loans.”

They add, however, that the ruling “may have the effect of precluding the ability of PSW and the tenants at Peter Cooper Village and Stuyvesant Town from participating in the restructuring of the ownership of the property and implementing a permanent affordable housing solution.”

Mitchell Hochberg, principal with Madden Real Estate Ventures, who is not involved in the case, tells GlobeStcom, “Pending another appeal in this high-stakes chess match, CWCapital has checkmated the Ackman challenge. With the first mortgage foreclosure now proceeding on Oct. 4, the next big question is whether anyone other than CWCapital will bid. To do so, they would have to believe that the property is worth more than $3.67 billion, which is doubtful.”