NEW YORK CITY-CWCapital Asset Management’s foreclosure auctionon Peter Cooper Village/Stuyvesant Town will go ahead as scheduledthis coming Monday, following a New York court’s refusal to grant astay of the auction. The senior mezzanine debtholders on the80-acre Manhattan apartment complex, a partnership of WilliamAckman’s Pershing Square Capital Management and Winthrop RealtyTrust, say in a statement that they’ll continue to fight butacknowledge that they may be frozen out of the process.

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“We’re going to go ahead on Monday,” Gregory Cross, a VenableLLP partner who represented CWCapital in court, told Reuters. ThePershing/Winthrop partnership known as PSW NYC LLC, he said, “hadno more ability to enjoin our foreclosure than the Red Sox have tostop the Yankees from signing free agents.” Calls by GlobeSt.com toVenable and to CWCapital were not returned by deadline.

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

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They add, however, that the ruling “may have the effect ofprecluding the ability of PSW and the tenants at Peter CooperVillage and Stuyvesant Town from participating in the restructuringof the ownership of the property and implementing a permanentaffordable housing solution.”

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

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.