Billionaire hedge fund manager Bill Ackman may find himself on the losing side of a multimillion-dollar bet on a big and storied piece of New York City real estate.
A New York State Supreme Court judge denied a request by Ackman and his partner to take the massive Peter Cooper Village and Stuyvesant Town on Manhattan's East Side into foreclosure. Ackman and his partner, Winthrop Realty Trust spent $45 million dollars to buy $300 million of deeply discounted junior debt on the 80 acre, 56 building property.
They then launched an legal fight to take it into foreclosure and emerge as a part owner of the multibillion dollar property. Their legal argument being an agreement between the creditors gave junior debt holders the ability to foreclose on the property without paying off senior creditors first.
In a ruling Thursday, State Supreme Court Judge Richard Lowe sided with the senior creditors. Judge Lowe wrote an intercreditor agreement is "unambiguous" in saying junior creditors must repay the $3.66 billion in loans and interest due senior creditors before foreclosing on the property.