Stuyvesant Town-Peter Cooper Village Tenants Association

Appaloosa Management’s motion to intervene in the Stuyvesant Town/Peter Cooper Village case was denied on Thursday, April 29, in a court hearing held in New York. “[Appaloosa] can’t act on behalf of all the certificate holders or all of the defendants. And, so, it has no place in this lawsuit,” said Judge Alvin K.Hellerstein.

Appaloosa, an investor in the StuyTown CMBS [commercial mortgage-backed securities] deals, is opposed to
 CW Capital’s foreclosure action and was attempting to intervene in order to steer the workout toward bankruptcy. Judge Hellerstein seemed acutely aware of the precedent-setting nature
 of the lawsuit. Granting the motion would create “chaos” by opening the door for other bondholders to intervene in future cases, Hellerstein said. Speaking to 
legal counsel for Appaloosa, Judge Hellerstein said, “If I let you intervene then I’d have to let every certificate holder intervene ... and that would cause inefficiency and chaos.” He
 appeared unmoved by Appaloosa’s claim as the stakeholder to the fulcrum class, stating that the fulcrum is a “dynamic concept” based on speculated losses and can quickly shift between owners.



Counsel for Appaloosa argued that CW Capital’s plan to incur USD 200m in “wholly avoidable, wasteful” foreclosure-related taxes constituted a breech of fiduciary duties. Hellerstein responded, “Maybe [CW Capital] made an unwise choice but they have to make a choice. ... It may be an unwise action, but it’s not a breech.” He was also skeptical of Appaloosa’s argument that CW Capital has an inherent conflict of interest as both the special servicer and controlling class holder of the deal. “The very nature of the relationship is Appaloosa must be made whole until you reach
 debt that is more subordinate,” he said.

After the hearing had been adjourned, the judge informally questioned legal counsel for CW Capital on the upcoming process. At the top of his concerns was whether a receiver will need to be appointed and issues over jurisdiction. A receiver is not
 being sought, legal counsel for CW Capital responded, since the servicer is working with Rose Associates and Tishman Speyer to operate the property.



by Sarika Gangar

Source: Debtwire