NEW YORK, April 10 (Reuters) - A New York judge has approved a $68.75 million settlement between the current and former owners of Stuyvesant Town and Peter Cooper Village and tenants who said they were overcharged on rent of the sprawling Manhattan apartment complex, tenants’ lawyers said Wednesday.
Under the deal, bondholders who hold the mortgage to the property, which is serviced by CWCapital Asset Management LLC, and past owner MetLife Inc will pay a total of $68.75 million to roughly 27,500 class members. The tenants also saved roughly $105 million in rent reductions, bringing the total recovery to $173.25 million, lawyers for the tenants said.
The deal was preliminarily approved by Justice Richard Lowe in New York state court in November.
The settlement effectively ends the years-long litigation and relieves a major hurdle blocking a potential sale of the complex.
Plaintiffs’ lawyers said the deal was the largest tenant settlement in U.S. history. “This is a genuinely historic and well-deserved outcome,” said Alexander Schmidt, a lead plaintiffs’ attorney, in a statement.
A lawyer and spokesman for CWCapital did not immediately return requests for comment, nor did a spokesman for MetLife.
About 25,000 people live in Stuyvesant Town and Peter Cooper Village, a complex of 56 high-rise brick buildings with roughly 11,200 units on Manhattan’s East Side.
Tenants sued in 2007, saying that the owners of the complex had illegally deregulated apartments and raised rents for thousands of tenants, while benefiting from tax breaks available for rent-stabilized buildings. They had sought roughly $215 million in their lawsuit.
Under the deal, bondholders will contribute $58.25 million of the $68.75 million cash component of the settlement, according to tenants’ lawyers. Past owner MetLife Inc. will contribute $10.5 million, tenants’ lawyers said.
An estimated 27,500 class members will receive settlement checks ranging from $150 to more than $100,000 later this year, they added.
The settlement also continues rent stabilization for 4,311 formerly de-controlled units in Stuyvesant Town and Peter Cooper Village through June 2020, tenants’ lawyers said. Depending on market rates, the additional stabilization measures save tenants as much as $300 million by 2020, according to tenants’ lawyers.
Tenants’ lawyers will received $18.9 million from the settlement fund for their work, they added.
MetLife sold the complex in 2007 for a record $5.4 billion to a group led by Tishman Speyer Properties LP and a real estate unit of Blackrock Inc.
CWCapital, a special servicer representing bondholders, took control of the complex after Tishman missed a debt payment.