NEW YORK CITY—In the wake of a lawsuit brought by lenders against CWCapital Asset Managementlast week—with the plantiffs alleging that they are being cheatedout of hundreds of millions of dollars following the firm'stakeover of the Stuyvesant Town and Peter Cooper Villagedevelopment—CWCapital has issued a comment to GlobeSt.com.

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Says a spokesman for the company, "The assertions made in thelawsuit are utterly baseless and without merit. The fact that thecomplaint centers on a deed in lieu transaction completed beforethe plaintiff acquired their position exposes the plaintiff'sspecific intent to wrest a quick profit from 'purchasedlitigation.'

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He continues, "Centerbridge acquired this position at a deepdiscount in hopes of reaping a windfall at the expense of thebondholders we represent and residents who deserve a timelyresolution that will provide certainty and a path forward for thecommunity."

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CW—which has managed the 11,000-unit apartment complex onbondholders' behalf since 2010—tooktitle to the property in June by exercising a deed in lieu offoreclosure. CW canceled an auction and indicated it will put thecomplex up for sale.

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CW is charged with having engaged in “a continuing pattern ofmisconduct designed to keep CW in control” of the property and“reap an unjust windfall” of $1 billion that should go tolower-level lenders who have received nothing, according to thecomplaint filed Thursday in New York State Supreme Court inManhattan.

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The filing, supplied by the lenders, couldn't immediately beverified in electronic court records by Bloomberg. Thelenders, using names such as PCVST Mezzco 4 LLC, asked a judge toaward unspecified compensatory and punitive damages. The apartmentcomplex was purchased for $5.4 billion in 2006, according to thecomplaint. The buyers, Tishman Speyer Properties LP and BlackRockInc., defaulted on a $3 billion mortgage in 2010, hurt by thefinancial crisis and thwarted plans to raise rents.

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Private-equity firm Fortress Investment Group, which owns CW,had been seeking financing for a potential $4.7 billion bid on thecomplex, a person familiar with the matter said in May. Fortressdid not respond to a request for comment 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.