NEW YORK CITY—CWCapital Asset Management has been sued by lenders claiming they are being cheated out of hundreds of millions of dollars in the takeover of the Stuyvesant Town and Peter Cooper Village development, according to Bloomberg News.
CW—which has managed the 11,000-unit apartment complex on bondholders' behalf since 2010—took title to the property in June by exercising a deed in lieu of foreclosure. CW canceled an auction and indicated it will put the complex up for sale.
CW is charged with having engaged in “a continuing pattern of misconduct designed to keep CW in control” of the property and “reap an unjust windfall” of $1 billion that should go to lower-level lenders who have received nothing, according to Bloomberg's reporting on the complaint.
The filing, supplied by the lenders, couldn't immediately be verified in electronic court records by Bloomberg. The lenders, using names such as PCVST Mezzco 4 LLC, asked a judge to award unspecified compensatory and punitive damages. The apartment complex was purchased for $5.4 billion in 2006, according to the complaint. The buyers, Tishman Speyer Properties LP and BlackRock Inc., defaulted on a $3 billion mortgage in 2010, hurt by the financial crisis and thwarted plans to raise rents.
Private-equity firm Fortress Investment Group, which owns CW, had been seeking financing for a potential $4.7 billion bid on the complex, a person familiar with the matter said in May.
CWCapital and Fortress declined to respond to requests for comment from GlobeSt.com by press time.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
