Challenge over reported $566M in fees
By Sabina Mollot
On the heels of news that CWCapital, Stuyvesant Town’s controlling entity since 2010, could walk away with over a half a billion dollars in fees from the recent sale and other services, investors have filed suit to try to prevent that from happening.
Investor groups with a trust that’s a lead lender of the property’s senior debt filed the legal action last Thursday. This was after, they said, CWCapital “deflected or ignored” their questions about how the company intended to disperse the reportedly massive windfall. The plaintiffs, affiliated with hedge fund Appaloosa Management, are: Appaloosa Investment, L.P.I, Palomino Fund Ltd., Thoroughbred Fund L.P., and Thoroughbred Master Ltd.
The investors said CW has reportedly claimed it is entitled to about $566 million in default interest, based on a three percent rate on the senior loan calculated from 2010 and the fact that the property was sold for more than the senior debt. However, the plaintiffs argued, that money is not supposed to go to CWCapital, but instead to senior lenders.