Hedge Fund Moves In On Stuyvesant Town

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Appaloosa Management, a multi-billion-dollar New Jersey hedge fund led by investor David Tepper, has filed papers in United States District Court in Manhattan objecting to the way the foreclosure of Stuyvesant Town and Peter Cooper Village has been handled. Appaloosa, which now controls $750 million of the $3 billion in mortgages for the property, claims that special server CW Capital improperly entered foreclosure, exposing debt holders to up to $200 million in transfer taxes. A better alternative, according to the hedge fund, would have been to force former owners Tishman Speyer and BlackRock to go into bankruptcy court. But Tepper tells the Times that he doesn't want to take over the complexes, which are occupied by some 25,000 tenants. He just wants to stop CW Capital from acting in a "reckless" manner. But if it does come to taking more control, Tepper told the Times that his interests were not “at odds” with those of tenants. “We recognize the fact that at some point, there needs to be some degree of rent controlled apartments there,” he said. (Stuyvesant Town and Peter Cooper Village are rent stabilized, not rent controlled.)

Hedge Fund Moves on Stuyvesant Town and Peter Cooper Village [NYT]