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.
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.
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.
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. 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 settlement agreement and other pertinent information about the settlement and the litigation are available at www.berdonclaims.com.
For more information, contact Dana S. Smith, Esq. at Dsmith@bernlieb.com or (877) 779-1414.