Pershing Square Capital Management and Winthrop Realty Trust are suing CWCapital for $500 million, claiming they got bilked out of a fat profit when the special servicer foreclosed on Stuyvesant Town-Peter Cooper Village and then sold it for $5.3 billion. The suit is the latest in a number of legal challenges alleging foul play in the run-up to the blockbuster December deal CWCapital struck with the Blackstone Group and Ivanhoe Cambridge.
Understanding the lawsuit requires a quick dive into the complex debt structure that existed under the apartment complex’s old ownership.
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When Tishman Speyer and BlackRock bought Stuy Town in 2006, they financed the $5.4 billion deal with a heavy load of senior and mezzanine debt. In 2010, they defaulted on their obligations and in June of that year, a federal judge green-lighted foreclosure.
