Stuyvesant Town (Mezz vs Senior Debt, Part II) – A Case to Watch

02/18/2015

PCVST Mezzco 4, LLC et al. v. Wachovia Bank Commercial Mortgage Trust 2007-C30 et al. (the “Action”)

A high profile dispute between the senior mortgage lender consisting of four securitization trusts (collectively, the “Senior Lender”) and their special servicer, CWCapital Asset Management LLC (“CW”), on one hand and on the other, the assignees of certain junior mezzanine lenders (the “Junior Lenders”) who financed the 2006 acquisition of Stuyvesant Town and Peter Cooper Village (the “Property”) will be played out in the New York Supreme Court as a result of a January 12, 2015 federal court decision granting plaintiffs’ motion to remand the Action to state court for lack of federal subject matter jurisdiction. According to papers filed by the Senior Lender, the six plaintiffs controlling six separate tiers of mezzanine debt are affiliates of Centerbridge Partners, L.P. In their amended complaint, plaintiffs attack the Senior Lender’s orchestration of a deed in lieu of foreclosure transaction in June 2014 which they claim violated the governing intercreditor agreement and other loan documents, improperly rendering their junior loans worthless and depriving them of the opportunity to participate in more than $1 billion of current Property value in excess of the outstanding senior mortgage debt.

To read the full article, click on the PDF linked below.

Stuyvesant-Town.pdf

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