Pershing, Winthrop Appeal Stuy-Town Ruling

VNEW YORK CITY-The partnership of Pershing Square Capital Management and Winthrop Realty Trust that’s seeking to take control of Peter Cooper Village/Stuyvesant Town has appealed last Thursday’s ruling in favor of the senior lenders on the Manhattan apartment complex. Court documents show that the partnership, known as PSW NYC LLC, filed the appeal Friday with the Appellate Division of New York State Supreme Court.

In a pre-argument statement also filed Friday, PSW attorney Edward Weisfelner of Brown Rudnick LLP argues that the ruling by Justice Richard B. Lowe III contains “several errors of law.” Lowe ruled that the intercreditor agreement on the $3-billion first mortgage for the 2006 purchase of Stuy-Town was “unambiguous” in requiring that PSW pay off the mortgage before assuming control of the 11,227-unit complex.

Weisfelner countered that Lowe “wrongly construed the contractual terms at issue as preventing defendant PSW from acquiring or selling certain equity collateral without first paying plaintiffs outstanding indebtedness under a senior loan. The contractual terms, however, impose no such condition.”

PSW is seeking to obtain a stay of Lowe’s preliminary injunction issued by Lowe last week or to “modify or limit” the injunction so that the “status quo” on the property will be preserved pending its appeal. Senior lenders, represented by CWCapital Asset Management, are planning to foreclose on the first mortgage on Oct. 4.

Several high-profile contenders, including multifamily developer Gerald Guterman and a group led by Wilbur Ross, reportedly have expressed interest in Stuy-Town. PSW is also seeking to convert Stuy-Town to condominiums, in a deal that would give the tenants association as much as a 50% stake; Bloomberg reported that Guterman has a conversion plan of his own on the rental complex.

A spokesman for Venable LLP, the law firm representing CWCapital, did not respond to GlobeSt.com’s inquiries by deadline.