The Battle for Stuyvesant Town
September 7, 2010, 5:00 PM
The fate of Stuyvesant Town and Peter Cooper Village rests on the interpretation of one clause in a legal agreement.
Depending upon a judge’s reading of this agreement, control of the gargantuan housing complex in lower Manhattan will go either to the two investment funds Pershing Square Capital Management and Winthrop Realty Trust or to the senior lenders to the project, which include Fannie Mae and Freddie Mac.
This battle between these two parties originates in the financing structure for the $5.4 billion October 2006 acquisition of Stuyvesant Town by the Tishman Speyer Development Corporation."
At the time of this financing, the senior and mezzanine lenders entered into an intercreditor agreement to govern their relationship. This is an arrangement typically entered into by creditors with differing security interests to ensure that their relationship terms are set forth at the beginning of the investment. The general purpose of the agreement is to make sure that the senior creditors subordinate the more junior lenders, meaning that the payment of the senior lender debt comes first.
In January, Tishman decided to cease paying all of the debt, both senior and mezzanine. This was the equivalent of deciding to hand over the keys to Stuy Town to these lenders.
Yet the battle only really began on Aug. 6, when Pershing and Winthrop bought the three most senior tranches of the mezzanine loans. Winthrop had actually held an interest in the loans since 2007.
The loans had a face value of $300 million but the two funds paid>>>>KEEP READING
The loans had a face value of $300 million but the two funds paid>>>>KEEP READING
No comments:
Post a Comment