NEW YORK (Reuters) - A representative of thebondholders of a $3 billion mortgage on a vast Manhattanapartment complex has set Oct. 4 as the date to sell StuyvesantTown and Peter Cooper Village in a foreclosure auction.
The representative, CWCapital, advertised the foreclosureauction in Sunday's edition of The New York Times.
But the foreclosure on the properties, which consist of 56buildings on 80 acres on the east side of lower Manhattan,will have to wait until a state court judge rules on twocompeting plans by creditors.
The property foreclosure was filed in a federal DistrictCourt in Manhattan. But Thursday, a New York state courtjudge blocked that auction and another from a differentcreditor who wants to take control of the property byforeclosing on the company that owns it.
The bondholders are battling a joint venture led by hedgefund manager William Ackman's Pershing Square CapitalManagement LP, which seeks to foreclose on the equity of theowner PCV ST.
The property became a textbook case of excessive lendingand spending on U.S. commercial real estate during the boom of2005 through 2006. A group led by Tishman-Speyer Propertiespaid $5.4 billion for the two complexes and created a company,PVC ST, to do the deal. But earlier this year the companydefaulted on its loan payments. The property is thought to beworth less than half that sum.
Pershing and Winthrop Realty Trust, which bought adefaulted $300 million junior loan for 15 cents on the dollar,had sought to foreclose on PCV ST, the company that owned theproperty, by Sept. 8. Winthrop originally owned the junior loanportion. That loan is secured by shares in the owner and not theproperty, while the mortgage is secured by the property.
The bondholders are now owed $3.66 billion, which isthe mortgage plus interest and fees.