Bank of America Corp. and U.S. Bancorp sued to block an entity seeking to foreclose on the equity interests of the owner of Manhattan's Stuyvesant Town and Peter Cooper Village apartment complex.
The entity, PSW NYC LLC, has scheduled an Aug. 25 foreclosure auction. The group is a joint venture between Bill Ackman's Pershing Square Capital Management LP and Winthrop Realty Trust, which together bought $300 million in defaulted mezzanine loans on the 80-acre property.
The joint venture wants to foreclose on the equity interests of the company that owns the apartment complex and is responsible for paying the $3 billion first mortgage. If successful, the venture will place the entity into bankruptcy, and avoid paying the mortgage, according to the lawsuit.
The Pershing and Winthrop plan violates terms of the intercreditor agreement for the property, according to the suit, filed Wednesday in New York State Supreme Court in Manhattan.