Stuy Town Creditors Now Battling About Grammar


pcv 2 Stuy Town Creditors Now Battling About Grammar Looks like things have gotten so bad in the fight between Stuyvesant Town creditors CW Capital and Pershing Square/Winthrop Realty Trust (PSW), that they’re now fighting over punctuation.

From the latest brief in the ongoing fight, filed yesterday by CW Capital:

Without any explanation, PSW injects the doctrine of last antecedent to convince this Court that an entire clause that follows a semicolon modifies a sentence fragment that precedes the semicolon. Once again, PSW’s assertions lack any legal support. Under New York law, it is well-established that a semicolon creates independent and separate sentences.

And this syntax attack came after PSW assailed CW Capital for a liberal use of ellipses in its first brief, saying “CWCAM needed to delete more than half of the language of the latter [a relevant section of the intercreditor agreement], including both the subject and the verb.”


The CW filing from yesterday was a reply brief—the issue of the grammar is actually a bit more significant than it lets on in that excerpt—in advance of tomorrow’s court hearing, in which a judge could render a highly significant decision for the 11,200-apartment complex. Specifically, Justice Richard Lowe III is bringing both CW Capital and the PSW team in to hear the merits of whether PSW, led by Winthrop and investor Bill Ackman, can legally whisk away the property from CW Capital, which has been trying for nine months to finish a foreclosure. Mr. Ackman and his team, who are holders of mezzanine debt, want to foreclose themselves, jumping in front of CW Capital, which represents the senior mortgage.

With the fate of the ever-desirable property at stake, the swords are certainly drawn.

CW Capital’s latest brief, submitted by lead attorney Gregory Cross of Baltimore-based Venable, is more than a little caustic. Among other legal aspersions, the brief accuses PSW of “revisionist history;” it says the firm makes arguments that are “hollow and simply wrong;” and it vows that “the inaccuracies of PSW’s assertions will be quickly revealed.”

Here’s another:

PSW does not cite a single case, industry expert or secondary source material in support of the intercreditor interpretations it advances. The absence of any support for PSW’s assertions is striking, but explainable. No support exists.

Colorful language aside, the brief represents a CW Capital response that essentially reiterates its position that the intercreditor agreement bars PSW from foreclosing without first paying off CW Capital (for $3.6 billion). PSW holds that, by its reading of the agreement, it does, actually, have the ability to foreclose (and has invested $45 million in the assumption that its play will work).

The fun starts at 9:30 a.m. Thursday at 60 Centre Street.

Update 5:00 p.m.

In a reply filing this afternoon to CW Capital’s reply brief (which itself was a reply to a reply by PSW), Winthrop CEO Michael Ashner hit back at CW Capital, which had accused him of “greenmail” when CW Capital was approached about buying up some of the mezzanine debt. (Greenmail is when one investor buys up shares of a target company’s stock, and forces that company to buy the stock back at a higher price or to face takeover).

From an affidavit by Mr. Ashner: 

I deeply resent the implications contained in the Hundertmark Affidavit [a prior filing by CW Capital] that I engaged in ‘greenmail.’ I never solicited any offer from CWCAM. Any and all conversations regarding my intentions were conducted between myself and other Mezz 1-3 holders, and did not involve any requests for ‘greenmail.’

The full reply brief from CW Capital is here.