So will previous market rate tenants get screwed? Benefit? And how much have the lawyers received? The best place to find answers, if any at this early point, is on the TA Facebook page. The discussions there will be pertinent to people's concerns.
Below is the news:
Stuyvesant Town Class Action Parties Reach Settlement –
Agreement Signed Today Provides $68.75 Million to Pay Damages;
Total Tenants’ Rent Recovery to Exceed $146.85 Million
November 29, 2012 – Wolf Haldenstein Adler Freeman & Herz LLP and
Bernstein Liebhard LLP, co-lead counsel for the plaintiff tenants in the
Roberts v. Tishman Speyer class action, announced they have signed an
agreement with the defendants to settle all past rent overcharge claims
and future rent claims raised in the action. The settlement was
preliminarily approved today by Justice Richard B. Lowe, III, the Chief
Justice of the Appellate Term, First Department. The agreement requires
final court approval. A hearing on final approval is scheduled for
April 9, 2013.
The settlement agreement signed today sets
aside $68.75 million to compensate class members for rent overcharges
from January 22, 2003, the start of the class period, through December
31, 2011, the end of the overcharge period.
“Once finally
approved, today’s $68.75 million settlement agreement, when combined
with past refunds and rent savings the tenants have already received,
will bring the total recovery in the lawsuit to at least $146.85
million,” said Alexander Schmidt of Wolf Haldenstein, the plaintiffs’
lead attorney. “There will also be future benefits,” he added.
The past rent savings and refunds resulted from an interim agreement
that was reached in the case in December 2009 between the plaintiffs and
the two limited partnerships that currently own Stuyvesant Town and
Peter Cooper Village, PCV ST Owner LP and ST Owner LP. Under that
interim agreement $2.4 million in rent was refunded to class member
tenants in 2010, and the tenants saved an additional $75.7 million in
rent over the past three years, Schmidt said. Ronald Aranoff of
Bernstein Liebhard, another of the plaintiffs’ lead attorneys added “we
believe this settlement provides an extraordinary recovery for our
clients and we couldn’t be happier for them.”
Schmidt noted
that the $146.85 million amount could significantly increase in the
future because the settlement sets future rents based on a “Preferential
Rent” formula that will save tenants at least another ten to twenty
million dollars, and potentially more than a hundred million, over the
next eight years. The exact amount of future rent savings under the
formula will depend on future rental market conditions and tenant
turnover rates, Schmidt added.
The settlement also continues
rent stabilization through June 2020 for each of the 4,311 formerly
decontrolled Stuyvesant Town and Peter Cooper Village apartments at
issue in the suit. June 2020 is when the residential complexes’ New
York City “J-51” tax benefits expire. The New York Court of Appeals,
the state’s highest court, found in October 2009 that the apartments had
been removed improperly from rent stabilization while the complexes
were receiving those tax benefits, which are available only for rent
stabilized buildings.
The current owners of the complexes
contributed $58.25 million of the $68.75 million cash component provided
by today’s agreement. Metropolitan Tower Life Insurance Company, the
owner until mid-November 2006, contributed $10.5 million.
The
settlement concludes almost 18 months of negotiations. Aranoff said
that today’s $68.75 million settlement includes a generous legal rent
formula for the past rent overcharge claims, which yields damages of
almost $10,000 per leasehold and average damage awards of $3,200 for the
21,250 class members.
Because the legal rent formula under
the interim agreement was even more generous, Schmidt said, the rents
going forward may be adjusted upwards by the landlord after the
settlement is finally approved, subject to the Preferential Rent formula
caps.
The cash received and saved will not be the only
benefits the class members achieve as a result of this litigation,
Schmidt said. “Class members will realize substantial additional
benefits by retaining the full protections of the Rent Stabilization Law
for the next eight years, including, most importantly, the rights to
automatic lease renewal and succession. The settlement is eminently
fair and reasonable, and a very good result for the tenants.”
The settlement agreement and other pertinent information about the
settlement and the litigation are available atwww.berdonclaims.com
(click “Cases: Current and Completed,” narrow your search to “New
Cases” and click “Stuyvesant Town Class Action”).
Media Contact for Wolf Haldenstein Adler Freeman & Herz:
Lisa King Ned Steele
lisak@mediaimpact.biz neds@mediaimpact.biz
(m) 646-234-5080 (m) 646-234-5070
(o) 212-590-2313 (o) 212-590-2313
I am a long time rent stabilized tenant and have nothing to lose or gain with the Roberts case; however, it looks to me like the market rate/rs(?) tenants are going to get f**ked royally in the ass by this "settlement." On top of being gouged for ridiculously high rents for what is basically good, but not THAT good, living conditions, they are now going to have their rents brought UP to rent stabilized level instead of brought DOWN and being issued refunds for being overcharged. Seems like smoke and mirrors to me. Only winners here are the landlord and the lawyers. This is America today, folks: Land of the Oligarchs. God help us.
ReplyDeleteAccording to today's (11/30) NYT: "Alexander Schmidt, a lawyer for the tenants, said the $68.7 million agreement, combined with past rent rollbacks, brought the total recovery to $146.85 million. His firm, Wolf Haldenstein Adler Freeman & Herz, and a second firm, Bernstein Liebhard, will receive 27.5 percent of the settlement, $18.9 million."
ReplyDeleteBefore anyone gets apoplectic about what the lawyers get, remember that in personal injury cases lawyers get a third of the settlement.
Full article at http://www.nytimes.com/2012/11/30/nyregion/68-7-million-settlement-on-stuyvesant-town-rents.html
"Before anyone gets apoplectic about what the lawyers get, remember that in personal injury cases lawyers get a third of the settlement."
ReplyDeleteActually, it's more like one half nowadays. However, the real loss of money to the plaintiffs occurs when the lawyers get not only 1/3 or 1/2 or whatever it is PLUS EXPENSES. I was once sent a bill for a class action suit I had no idea I was even involved in because the lawyers fee plus expenses exceeded the amount of the settlement.
It seems like the lawyers gave away the store on this one by using January 2003 as the base rent. Hello! The whole case was built around illegal deregulation. How is it that they aren't starting at the legal rent as a base? No doubt this is just a matter of the lawyers seeing a big payday. What a joke.
ReplyDeleteAccording to today's (11/30) NYT: "Alexander Schmidt, a lawyer for the tenants, said the $68.7 million agreement, combined with past rent rollbacks, brought the total recovery to $146.85 million. His firm, Wolf Haldenstein Adler Freeman & Herz, and a second firm, Bernstein Liebhard, will receive 27.5 percent of the settlement, $18.9 million."
ReplyDeleteThat is disgusting.
If the so called market raters get bump up to "rent stabilized" rate which, incredibly, could be higher (!), I suspect a lot of them will just move out and we will get more and more NYU frat brats moving in at the rate of 6+ per apartment. PCVST as an affordable, livable place is finished. They might as well just tear it down. All because of insatiable corporate greed, stupidity and dishonesty. It started with Benmoishe, then Tishman Speyer and now it's in the hands of another prize schnorrer, Andy Mac. They should all die and rot in hell.
ReplyDeleteYou have to read everything before you judge. Tenants will average $3,200 apiece, on top of the rent they saved, and Times said some are getting over $100,000. If you look at the $150 million the tenants are getting paid or save, the lawyers fees are about 12%. That's very low. Expenses cannot be more than a few hundred grand to a few million, tops.
ReplyDeletebut how will this settlement impact the conversion-if at all???
ReplyDeleteYou think that's disgusting STR ? Wait till you see the bills from Paul, Weiss.. and Moelis if the condo conversion ever happens.
ReplyDeleteBTW, I'm not a lawyer or a financial wizard, but it looks to me like the big winner here is CW and the attorneys, with a few shekels being doled out to FMR lease holders. It sounds like the owner of the property will get to keep a significant amount of their rent roll. My feeling is that they've now renovated so many apartments (remember that there are a great deal of FMR apartments not part of the Roberts class), that when it comes time to price out the conversion, the ONLY decent deals will be had by original RS tenants (as it should be), and even those might not be so cheap. In any event, a comment was made that the fallout from the decision will push back any conversion planning by 18 months, so that's mid summer 2014 at the earliest, add in the 2 years to do the deal, and you're talking summer 2016, just a few years before the J-51 expires.
Big win for Wolf. Kick in the ass to the tenants.
ReplyDeleteHey, maybe we can get them to represent us in the "conversion!"
While you are thinking about that, take a look at the legal definition of conversion: http://legal-dictionary.thefreedictionary.com/conversion
STR and those who think the lawyer's fees are disgusting:
ReplyDeleteThis was a complicated case from the start that most people thought had absolutely no chance of winning. It took and before it is finalized, will take more than six years of intense legal effort. Noting that the lawyers invested a lot of time and money into this effort with no guarantee that they would win or get anything for the tenants and thus not be paid at all for their time or expenses, what would you propose that the lawyers be paid, assuming you beleive that they shoud be paid at all?
It remains to be seen who has won in this case. As for the lawyers' fees, sorry, but 25% plus is disgusting. I wonder if lawyer fees were capped if this case would have been settled far, far sooner.
ReplyDelete"Big win for Wolf. Kick in the ass to the tenants."
ReplyDeleteWolf by name and wolf by nature. Typical lawyer, in other words. Most lawyers are amoral, greedy, lowlife scum which is why so many of them go into politics.
Since when is $150 million a kick in the pants to tenants? Rents dropped by hundreds or dollars per month for last three years saving everyone $75 million and now people are going to get refunds for prior years and get all the money back they over paid. Alot of lawyers are greedy and in it for themselves, but this is not a deal where we get coupons for a few bucks against future rent and the lawyers make millions. I saved a lot on rent for three years without having to hire my own lawyer or pay his expenses, so these lawyers did good by me. And if I get a check on top of it its a bonus. And there are 21 thousand people who got what I got? Without the hassle and stress of hiring a lawyer and going through a lawsuit. To say the lawyers don't deserve to be paid 25 pct is not fair at all. And 25 pct of $150 million is is 32.5 million, and they are getting only around 19, so the 25 pct is not even the right number. How can you gripe about this settlement?
ReplyDeleteThen don't hire a lawyer. Do it yourself.
ReplyDeleteIf laws were written in plain English, one could do it themselves. However, since the lawyers lobby and politicians (themselves mostly lawyers) keep killing bills that call for just that, it will never happen. Self preservation at the expense of everyone else. That's why I hate lawyers and politicians.
ReplyDeleteQ: What's 50,000 lawyers on the bottom of the ocean??
A: A good start!
The market rate tenants shouldn't even get the money. The city should get the money. The market rate tenants agreed to pay the amount on their lease, I don't see why they deserve the money. It's basically a windfall for them. I stand to gain about 75k under the formula, who knows what it will end up being after the legal fees etc, but I don't deserve the money. Of course I will take it, should offset the communist like taxes here in NYC so I guess this is my credit for all of the wasteful spending here. My point is that no market renters should complain about what they get because it's gravy.
ReplyDeleteMy wife, young child and I were tenants for 4 years from 2005. Our rent went up from 2600 to 3900 in that time (50% in 4 years), at which point we couldn't afford it and had to moved out. If they used my move-in(market) rent as the basis for their formula I would get about $12,000. My actual payout is $0.
ReplyDeleteWTF?