Now that Bloomberg won't help Stuy Town residents buy the foreclosed complex, hedge fund Appaloosa Management is taking a stab. The Times reports that the New Jersey based fund, led by David Tepper, filed a legal challenge yesterday against CW Capital Management, the company currently overseeing the Stuy Town and Peter Cooper Village complexes on behalf of the lenders. Appaloosa says CW has acted “irrationally and imprudently."
Appaloosa has already acquired $750 million of the $3 billion Stuy Town mortgage debt, but this is just one more player in the increasingly complicated property deal. Earlier this year, Tishman Speyer paid $5.4 billion for the property, hoping to convert the rent stabilized apartments to market rates to cover the remaining mortgage debt. That plan was actually illegal and they defaulted on their mortgage, handing the properties over to lenders. The properties are now worth just $1.8 billion.
Tepper said he didn't want to take over the complex so much as he wants CW to stop acting "reckless." But even if Appaloosa does try to take over, they'll have to go through Chuck Schumer first. The Senator told the Times, "We must avoid going back to the future and having any new buyer overpay for the complex that leaves tenants with an uncertain future...we must protect current and future tenants and preserve Stuyvesant Town and Peter Cooper Village as havens for the middle class."