FILED: NEW YORK COUNTY CLERK 08/18/2010 INDEX NO.

651293/2010
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 08/18/2010

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

---- ------------------------ -- ---- ------- ------- ---------- ------ --- )C

BANK OF AMERICA, N.A., as Trustee for the

Registered Holders ofWachovia Ban Commercial
Mortgage Trust 2007-C30, acting by and through its Inde)C No.: 651293/2010
Special Servicer, CWCapital Asset Management
LLC, BANK OF AMERICA, N.A., as Trustee for the
Registered Holders of COBALT CMBS Commercial
Mortgage Trust 2007 -C2, acting by and through
CWCapital Asset Management LLC pursuant to the PLAINTIFFS' MEMORANDUM
authority granted under that certain Amended and OF LAW IN SUPPORT OF
Restated Co-Lender Agreement dated March 12, FOR
MOTION

2007 and U.S. BANK NATIONAL ASSOCIATION, PRELIMINARY INJUNCTION

as Trustee for the Registered Holders ofWachovia
Ban Commercial Mortgage Trust 2007 -C31, ML-
CFC Commercial Mortgage Trust 2007-5 and ML-
CFC Commercial Mortgage Trust 2007-6, acting by
and through CWCapital Asset Management LLC
pursuant to the authority granted under that certain
Amended and Restated Co-Lender Agreement dated
March 12, 2007,

Plaintiffs,

-against-

PSWNYCLLC,

Defendant.

---- -------------- ------------ -------------- ---- ------ ---------- --- )C

 TABLE OF CONTENTS

PRELIMINARY STATEMENT...............................................................................................1

STATEMENT OF FACTS ........................................................................................................4

The Senior Loan.............................................................................................................4

The Mezzanine or Junior Loans.....................................................................................5

The Intercreditor Agreement..........................................................................................5

The Borrowers' Default................................................................................................. 7

PSW's Attempt to Seize Control.....................................................................................9

ARGUMENT ...........................................................................................................................10

i. Plaintiffs Are Likely To Succeed In Their Declaratory Judgment Action ..................11

A. PSW Canot Acquire the Equity Collateral Through a Credit Bid Without
Satisfying the Conditions of Section 6( d)(B) of the Intercreditor
Agreement .......................... ........... ................................................................ ..13

B. PSW Cannot Solicit, Direct, Cause, or Take Any Action in Furtherance of

Bankptcy When the Senior Loan is Outstanding...... ....................................i 6

II. Plaintiffs Have No Adequate Remedy At Law And Wil Be Irreparably Harmed
Absent Injunctive Relief............................................................................................. .17

III. A Balancing Of The Equities Tips In Favor Of Plaintiffs....................................... 21

CONCLUSION ........................................................................................................................23

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 TABLE OF AUTHORITIES

CASES PAGE

511 9th LLC v. Credit Suisse USA. Inc., 69 A.D.3d 497,894 N.Y.S.2d 385
(1st Dep't 2010) .......................................................................................................................15
Ale)Candru v. Pappas, 68 A.D.3d 690,890 N.Y.S.2d 593 (2d Dep't 2009)...................................10

Anecca Inc. v. Le)Cent, Inc., 307 F. Supp. 2d 999 (N.D. IlL. 2004)..............................................15

Audubon Levy Investors, LP v. East West Realty Ventures, LLC,

698 F. Supp. 2d 328 (E.D.N.Y. 2010) .....................................................................................19

Babcock & Wilco)C Co. v. Control Components, Inc., 161 Misc. 2d 636,
614 N.Y.S.2d 678 (Sup. Ct. N.Y. County 1993) ...........................................................................12

Bary v. Ready Reference Pub. Co., 25 A.D.2d 827, 269 N.Y.S.2d 665
(1st Dep't 1966) .......................................................................................................................12
Bashein v. Landau, 96 A.D.2d 479,465 N.Y.S.2d 178 (1st Dep't 1983) .....................................1 7

CanWest Global Commc'ns. Corp. v. Mirkaei Tikshoret Ltd.,

9 Misc. 3d 845,804 N.Y.S.2d 549 (Sup. Ct. N.Y. County 2005) ...........................................19

Citiban, N.A. v. Nyland (CF8) Ltd., 839 F.2d 93 (2d Cir. 1988) ................................................19

Consol. Container Co. v. Waren Unilube, Inc., No. 05-2371 B, 2006 WL 522424
(W.D. Tenn. March 3, 2006)....................................................................................................14

Cuomo v. Long Island Light Co., 71 N.Y.2d 349,520 N.E.2d 546 (1988) ..................................12

Federated Strategic Income Fund v. Mechala Group Jamaica Ltd.,

No. 99 Civ. 10517, 1999 WL 993648 (S.D.N.Y. Nov. 2, 1999) .............................................21

Ferramosca v. Nelrak, Inc., 250 A.D.2d 807, 673 N.Y.S.2d 712

(2d Dep't 1998)........................................................................................................................15
Ginett v. Computer Task Group, 962 F.2d 1085 (2d Cir. 1992)....................................................14

Gramercy Co. v. Benenson, 223 A.D.2d 497,637 N.Y.S.2d 383

(1st Dep't 1996).......................................................................................................................21

Gusinky v. Gengèr, No. 600426/2008,2009 WL 2534670

(Sup. Ct. N. Y. County Aug. 12,2009) ...................................................................................14

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Highland Park v. Wells Fargo Ban, No. 08 Civ. 5723 (NRB), 2009 WL 1834596
(S.D.N.Y. June 16, 2009)...................................................................................................11, 16
Ikon Office Solutions, Inc. v. Usherwood Offce Tech., Inc.,
21 Misc. 3d 1144A, 2008 N.Y. Slip Op. 52499(U),
(Sup. Ct. Albany County 2008) ............................................................... ...... ........ .......... ..18, 21

In re Suncru Casinos, 298 BR. 833 (Ban. S.D. Fl. 2003) .........................................................11

In re Westpoint Stevens, Inc., 600 F.3d 231 (2d Cir. 2010) ..........................................................1 1

Ion Media Networks, Inc. v. Cyrus Select Opportunities Master Fund, Ltd. (In re Ion Media
Networks, Inc.), 419 B.R. 585 (Ban. S.D.N.Y. 2009)..............................................11, 16,22

Israel v. Chabra, 537 F.3d 86 (2d Cir. 2008) .................................................................................14

Kalisch-Jarcho, Inc. v. City ofN.Y., 72 N.Y.2d 727,533 N.E.2d 258 (1988)..............................12

Klosterman v. Cuomo, 61 N.Y.2d 525, 463 N.E.2d 588 (1984) .................................................12

Lipsztein v. Mount Sinai Hosp., 170 A.D.2d 285,565 N.Y.S.2d 812

(1st Dep't 1991) .......................................................................................................................21
M&A Oasis, Inc. v. MTM Assocs., L.P., 307 A.D.2d 872, 764 N.Y.S.2d 9
(1 st Dep't 2003) .......................................................................................................................12
Mr. Natural, Inc. v. Unadulterated Food Prods., Inc.,
152 A.D.2d 729,544 N.Y.S.2d 182 (2d Dept. 1989) ..............................................................21

N. Atl. Instruents, Inc. v. Haber, 188 F.3d 38 (2d Cir. 1999).....................................................18

N.Y. County Lawyers' Ass'n v. State ofN.Y., 294 A.D.2d 69, 742 N.Y.S.2d 16
(1st Dep't 2002) .......................................................................................................................12
Nan Fuel Gas Distrib. Corp. v. Harford Fire Ins. Co., 28 A.D.3d 1169
814 N.Y.S.2d 436 (4th Dep't 2006).........................................................................................14

Netwolves Corp. v. Sullvan, No. 00 CIV. 8943(AGS), 00 CIV. 9628(AGS),

2001 WL 492463 (S.D.N.Y. May 9, 2001) .......................................................................20, 21

Oppenheimer & Co. v. Oppenheim, AppeL, Di)Con & Co., 86 N.Y.2d 685,
660 N.E.2d 415, 418 (1995)......................................................................................................15

Oracle Real Estate Holdings i, LLC v. Adrian Holdings Co. I LLC

582 F. Supp. 2d 616 (S.D.N.Y. 2008)................................................................................19, 20

Phelan v. City of Buffalo, 54 A.D.2d 262,388 N.Y.S.2d 469

(4th Dep't 1976).......................................................................................................................12

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Preferred Mortg. Brokers, Inc. v. Byfield, 282 A.D.2d 589 (2d Dep't 2001) ...............................15

Prodell v. State, 211 A.D.2d 966, 621 N.Y.S.2d 712 (3d Dep't 1995) .........................................12

Roswell Capital Parners LLC v. Alt. Const. Techs., No. 08 Civ. 10647(DLC),
2009 WL 222348 (S.D.N.Y. Jan. 30,2009) ............................................................................18

Scudder v. ZeckendorfHotels Corp., 224 N.Y.S.2d 432

(Sup. Ct. N. Y. County 1961) ..................................................................................................13

Seitzman v. Hudson River Assocs., 126 A.D.2d 211,513 N.Y.S.2d 148

(1st Dep't 1987).................................................................................................................10,22

Swift & Co. v. United States, 276 U.S. 311 (1928).......................................................................14

TAG 380 LLC v. ComMet 380, Inc., 10 N.Y.3d 507,890 N.E.2d 195 (2008).............................17

Thor Props., LLC v. Chetrit Group, LLC, No. 650514-09, 2010 WL 1740752
(Sup. Ct. N.Y. County 2010) ...................................................................................................14
Ticor Title Ins. Co. v. Cohen, 173 F .3d 63 (2d Cir. 1999) ................ ........................................... .18

Trustees of the Plumbers Local Union NO.1 Welfare Fund v. Manattan Plumbing Corp.,
No. 08 CV 3036(FB)(RML), 2009 WL 5821676 (E.D.N.Y. Oct. 8,2009) ............................20

Vt. Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470 (2004).........................................17

W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157,566 N.E.2d 639 (1990) ..........................22

Wallace v. 600 Parners Co., 86 N.Y.2d 543, 658 N.E.2d 715 (1995)..........................................22

Wisdom Import Sales Co., LLC v. Labatt Brewing Co. Ltd.,

339 F.3d 101 (2d. Cir. 2003)....................................................................................................19

Statutes and Secondary Sources

N.Y C.P.L.R. § 3001......................................................................................................................11

N.Y. C.P.L.R. § 6313.....................................................................................................................11

Restatement (Second) of Contracts § 226......... ...... ................................... ................................. ...14

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 Plaintiff Bank of America, N.A., as Trustee for the Registered Holders of the Wachovia

Bank Commercial Mortgage Trust 2007-C30 (the "2007-C30 Trust"), acting by and through its

Special Servicer, CWCapital Asset Management LLC ("CWCAM"), Plaintiff Ban of America,

N.A., as Trustee for the Registered Holders of the COBALT CMBS Commercial Mortgage Trust

2007-C2, acting by and through CWCAM pursuant to the authority granted under that certain

Amended and Restated Co-Lender Agreement dated March 12, 2007 (the "Co-Lender

Agreement") and Plaintiff U.S. Bank National Association, as Trustee for the Registered Holders

of the Wachovia Ban Commercial Mortgage Trust 2007-C31, ML-CFC Commercial Mortgage

Trust 2007-5 and the ML-CFC Commercial Mortgage Trust 2007-6, acting by and through

CWCAM pursuant to the authority granted under the Co-Lender Agreement, hereby submit this

Memorandum of Law in Support of Motion for Preliminar Injunction against Defendant PSW

NYC LLC ("PSW").

1
PRELIMINARY STATEMENT

This dispute poses a simple question. Does a contractual commitment mean anything?

The clear answer of Defendant PSW and its principals to this question is no. They characterize

as "ludicrous" any suggestion that they would comply with a contractual obligation to payoff the

Plaintiffs' Senior Loan and hold forth in the media about their intent to use banptcy to

involuntarily restructure the Plaintiffs' Senior Loan and remedies even though they contractually

agreed to take no action in furtherance of banptcy.

PSW's calculus is simple. There is no economic downside to breaching the Intercreditor

Agreement with the Plaintiffs because PSW has no assets to satisfy a billon dollar judgment, but

the potential economic upside is enormous as the Peter Cooper Vilage and Stuyvesant Town

1 Terms not derined in this Memorandum of Law shall have the meaning ascribed to them in the Complaint.
property ("PCV/ST" or the "Property") that is at stake is worth more than $2 Bilion dollars. For

the Plaintiffs, the risks are reversed. Enjoining PSW and its principals from these anticipatory

breaches is their only viable remedy. If PSW is not enjoined from conducting its planed UCC

foreclosure sale on August 25, the Plaintiffs' abilty to recover the $3.66 Bilion that is owing to

them wil be imperiled and the Property and its 25,000 residents wil be thrown into disaray.

The Plaintiffs are the Senior Lenders to the entities that own the Propert. On June 21,

2010, the Senior Lenders were awarded a judgment in the amount of $3,667,000,000 and an

order directing foreclosure by the United States District Cour for the Southern District of New

York. The PCV 1ST Borrowers consented to the foreclosure, as everyone associated with the

Property assumes that it is currently worth far less than the $3.66 Bilion that is owed to the

Senior Lenders. In anticipation of a credit bid, the Senior Lenders and PCV 1ST Borrowers have

been working cooperatively for the past nine months to facilitate the smooth transition of

management of the Propert's 25,000 residents and 550 employees following foreclosure. With

the management transition virtually complete, the Senior Lenders wil be filing a notice of

foreclosure sale with a foreclosure set to occur in the second half of September.

PSW, a recently formed Delaware shell entity, is new to the Property. Less than two

weeks ago, PSW reportedly acquired for appro)Cimately 15 cents on the dollar three tranches of

subordinated junior mezzanine loans that are secured by pledges of the equity ownership interest

in the PCVIST Borrowers. Immediately upon acquiring the junior loans, PSW's joint venture

parners, renowned hedge fund operator Bil Ackman and Michael Ashner, were quoted

e)Ctensively throughout the New York media regarding their plans to seize control of the Property

from the Senior Lenders through a banptcy. The first step in their plan is a uee sale that is

currently scheduled/or August 25,2010, which Plaintiffs received notice of just last week.

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 Mr. Ackman's and Mr. Ashner's plans for PSW and the PCVIST Borrowers are in direct

violation of PSW's contractual obligations to the Senior Lenders. PSW may pursue a UCC sale

of the Equity Collateral pledged to it, but it canot acquire the Equity Collateral through a credit

bid without curing all Senior Loan defaults, which in this case requires paying the Senior

Lenders $3.66 Bilion. PSW and its principals cast this obligation aside as "ludicrous" and plan

to simply discharge it in bankptcy. PSW is also contractually bound not to solicit, direct or

cause the Borrowers, or any entity which controls the Borrowers, or any other person to take any

action in fuherance of a Borrowers banptcy while the Senior Loan is outstanding. PSW is

treating this obligation with equal contempt, freely discussing its plans for bankptcy, and

actually retaining banptcy counsel for the PCV 1ST Borrowers after it forecloses.

PSW's strategy is not noveL. It has played out before in this and in other jurisdictions,

and courts have consistently found in favor of senior lenders, entering orders to enforce the terms

of intercreditor agreements. Accordingly, the Senior Lenders here ask this Cour to (i) enjoin

PSW and its principals from acquiring or sellng the Equity Collateral, which is scheduled to be

foreclosed upon on August 25, unless the Senior Loan default is cured (e.g., $3.66 Bilion is

paid), and (ii) enjoin PSW from taking any action in fuherance of a Borrowers bankptcy until

the Senior Loan is paid off in full.

Entering the requested injunctive relief poses no prejudice to PSW as it merely requires

compliance with the plain language of the paries' Intercreditor Agreement. On the other hand,

failure to enter the requested relief wil irreparably harm the Senior Lenders by jeopardizing the

stability and value of their collateral and their abilty to e)Cercise control over both the workout

process and the Property.

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BA2/3985 I I
 STATEMENT OF FACTS

Tishman Speyer Development Corp. ("Tishman") entered into a Purchase and Sale

Agreement on October 17, 2006 to purchase Peter Cooper Vilage and Stuyvesant Town from

Metropolitan Tower Life Insurance Company ("MetLife") for $5,400,000,000.00 (the

"Purchase"). The sale closed in 2007. Complaint dated August 18, 2010 ("Complaint") ir 8.

The Senior Loan

To finance the Purchase, PCV ST Owner LP ("PCV ST Owner") and ST Owner LP ("ST

Owner" and, collectively with PCV ST Owner, the "Borrowers"), both limited parnerships

affiliated with Tishman, entered into a senior secured loan in the amount of $3,000,000,000.00

(the "Senior Loan"), from the Senior Lenders. Complaint ir 9; Affidavit of Andrew J.
Hundermark dated August 17, 2010 (the "Hundertmark Aff.") ir 7. The Senior Loan is

evidenced by an Amended and Restated Loan and Security Agreement (the "Loan Agreement")

dated as of February 16, 2007. Complaint ir 9; Hundertmark Aff. ir 8. The Senior Loan is

memorialized by si)C notes. See Complaint ir 11; Hundertmark Aff. ir 10. Each of the Notes is

currently held in a mortgage securitization trust (collectively, the "Trusts" and each, a "Trust")?

Complaint ir 14; Hundertmark Aff. ir 13.3

2 Note A-I is held in Wachovia Bank Commercial Mortgage Trust 2007-C30, for which Bank of America, N.A.

("BofA"), as successor to Wells Fargo Bank, N.A. ("Wells Fargo"), serves as trstee. Note A-2 is held in COBALT
CMBS Commercial Mortgage Trust 2007-CMBS, for which BofA, as successor to Wells Fargo, serves as trstee.
Notes A-3 and A-4 are held in Wachovia Bank Commercial Mortgage Trust 2007-C3 i, for which U.S. Bank
National Association ("US Bank"), as successor to Wells Fargo, serves as trstee. Note A-5 is held in ML-CFC
Commercial Mortgage Trust 2007-5, for which US Bank, as successor to LaSalle Bank, N.A. ("LaSalle"), serves as
trstee. Note A-6 is held in ML-CFC Commercial Mortgage Trust 2007-6, for which US Bank, as successor to
LaSalle, serves as trstee.
3 CWCAM is the Special Servicer for the 2007-C30 Trust and is responsible for administering the Senior Loan on
behalf of the Senior Lenders. Complaint ir 15; Hundertark Aff. ir 15. On March 12, 2007, the Senior Lenders and
other parties thereto entered into an Amended and Restated Co-Lender Agreement (the "Co-Lender Agreement").
Pursuant to Section 2(t) ofthe Co-Lender Agreement, CWCAM has the exclusive right and obligation to administer,
service and make all decisions and determinations regarding the Senior Loan and to enforce the related Senior Loan
documents, including, but not limited to, the Intercreditor Agreement (derined infra). Complaint ir 16; Hundertark
Aff. ir 16.

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 The Mezzanine or Junior Loans

In order to obtain additional financing for the acquisition, the direct and indirect parents

of the Borrowers (collectively, the "Mezzanine Borrowers") secured an additional

$1,400,000,000.00 of mezzanine debt in 2007 when they purchased the Property. Complaint irir

17, 24; Hundertmark Aff. irir 17, 24. (The terms "Junior" and "Mezzanine" are used
interchangeably throughout this Memorandum.) The Mezzanine Borrowers pledged to the

Junior Lenders their direct and indirect equity ownership interests in the Borrowers and their

respective general parners in e)Cchange for eleven Mezzanine loans (the "Mezzanine Loans"),

with priority ruing in sequential order from Mezzanine 1 Loan (most senior) to Mezzanine 11

Loan (most junior). Complaint ir 17; Hundertmark Aff. ir 17.

Pursuant to separate amended and Restated Pledge and Security Agreements dated

February 16, 2007, each Junior Lender was granted a first priority security interest in the

corresponding Junior Borrower's ownership interest in the respective subsidiar Borrower or

Junior Borrower and the respective subsidiary Borrower's or Junior Borrower's general partner

(the "Equity Collateral"). Complaint ir 25; Hundertmark Aff. ir 25. The Junior Lenders were

not granted a security interest 0/ any kind in the Property.4 Complaint ir 26; Hundertmark Aff.

ir 26.

The Intercreditor Agreement

As a condition to the Mezzanine financing, the Senior Lenders and Junior Lenders,

entered into an Amended and Restated Intercreditor Agreement (the "Intercreditor Agreement")

dated February 16, 2007. Complaint ir 27; Hundertmark Aff. ir 27. For purposes of the

4 A chart diagramming the capital strcture of the Senior Loan and Mezzanine Loans is attached as Exhibit A to the
Affrmation of David E. Rice.

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BA2/398511
 injunction requested here, there are three salient provisions of the Intercreditor Agreement. First,

the Junior Loans are subordinate in every relevant respect to the Senior Loan.

Section 9. Subordination. of Junior Loans and Junior Loan

Documents. (a) Each Junior Lender hereby subordinates and makes
junior the Junior Loan held by such Junior Lender, the related Junior Loan
Documents and the liens and security interests created thereby, and all
rights, remedies, terms and covenants contained therein to (i) the Senior
Loan and the applicable Senior Junior Loans, (ii) the liens and security
interests created by the Senior Loan Documents and the applicable Senior
Junior Loan Documents.

Complaint ir 28; Hundertmark Aff. ir 28.

Second, consistent with their subordination, the Junior Lenders agreed to cure all defaults

under the Senior Loan as a condition to acquiring the Equity CollateraL. Section 6( d) provides in

relevant part:

Section 6. Foreclosure of Separate Collateral. To the extent that any

Qualifed Transferee5 acquires the Equity eollateral pledged to a Junior
Lender pursuant to the Junor Loan Documents in accordance with the
provisions and conditions of this Agreement . . . provided. however, . . .
(B) all defaults under (1) the Senior Loan and (2) the applicable Senior
Junior Loans, in each case which remain uncured or un the
waived as of

date of such acquisition have been cured by such Qualifed Transferee

or in the case of defaults that can only be cured by the Junior Lender
following its acquisition of the Equity eollateral, the same shall be
cured by the Junior Lender. . ..

Complaint irir 29-30; Hundertmark Aff. irir 29-30 (emphasis added).

Third, the Junior Lenders agreed not to solicit, direct or cause the Borrowers to

commence, or to consent to or acquiesce in the institution of banptcy proceedings while the

Senior Loan is outstanding. Section 11 (d)(ii) of the Intercreditor Agreement provides:

Section 11. Rights of Subrogation; Bankruptcy. For as long as the

Senior Loan shall remain outstanding, none of the Junior Lenders shall
solicit, direct or cause Borrower or any other entity which Controls

5 All Junior Lenders must represent and warrant that they are Qualified Transferees. See Intercreditor Agreement,
Section 5(a), Transfer of Junior Loan or Senior Loan, at p. 51, Section l(a), Definition of
Qualified Transferee, at p.
23, and Section 4(b)(viii), Representations and Waranties, at p. 43, attached as Exhibit E to the Hundertark Aff.

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 Borrower. . . or any other Person to: . . . (1) commence any Proceeding
against Borrower or any SPE Constituent Entity . . . (3) consent to, or
acquiesce in, the institution of bankruptcy or insolvency proceedings
against Borrower or (9) take any action in furtherance of the
foregoing.
Complaint ir 33; Hundertmark Aff. ir 33 (emphasis added).

In the event of a breach of the Intercreditor Agreement, including the sections cited

above, the Senior Lenders and Junior Lenders agreed that monetary damages would not be an

adequate remedy at law and agreed to the issuance of an injunction.

Section 34. Injunction. Each party to this Agreement acknowledges

(and waives any defense based on a claim) that monetary damages are not
an adequate remedy to redress a breach by the other hereunder and that a
breach by any pary hereunder would cause irreparable har to any other
pary to this Agreement. Accordingly, each party to this Agreement
agrees that upon a breach of this Agreement by any other party, the
remedies of injunction, declaratory judgment and specifc petformance
shall be available to such non-breaching party.

Complaint ir 35; Hundertmark Aff. ir 35 (emphasis added).

The Borrowers' Default

The Borrowers have failed to pay the monthly installments required under the Notes for

the period from January 8, 2010 through the date of this filing (the "Default"). Complaint ir 36;

Hundertmark Aff. ir 36. The Senior Lenders declared a default on January 8, 2010, and when the

Borrowers failed to cure the default, the Senior Lenders accelerated the unpaid debt outstanding

under the Notes on January 29, 2010, making all amounts immediately due and payable (the

"Acceleration"). Complaint irir 38-39; Hundertmark Aff. irir 38-39. A copy of the Senior Loan

Acceleration Letter is attached to the Hundertmark Aff. as Emibit G.6 Notice of the Default and

copies of the January 8, 2010 and January 29, 2010 letters were sent to all Junior Lenders.

6 Pursuant to Section 3.1 of the Notes, Section 6.01 of the Amended Mortgage, and Section 13.01 of the Senior
Loan Agreement, the Default constitutes an Event of Default under the Senior Loan documents, which entitles the
Plaintiffs to exercise their rights under the Senior Loan documents, including but not limited to, the right to
foreclose upon the Amended Mortgage. Complaint ir 37; Hundertark Aff. ir 37.

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BA2/398511
Complaint irir 40, 42; Hundertmark Aff. ir 43. As a result of the Default and Acceleration, the

full outstanding principal balance of the Senior Loan, all accrued and unpaid interest thereon and

all other sums owing under the Senior Loan documents are curently due and payable.

Complaint ir 41.

On January 8, 2010, CWCAM provided notice to the Junior Lenders that it had declared

a Default, (Complaint ir 42; Hundertmark Aff. ir 43), and pursuant to Section 12(a) of the parties'

Intercreditor Agreement, afforded the Junior Lenders the opportunity to cure the default. None

of the Junior Lenders exercised their rights to cure the default. Complaint ir 43; Hundertmark

Aff. ir 44.7

On February 18, 2010, CWCAM, on behalf of the Senior Lenders, fied a complaint in

the United States District Cour for the Southern District of N ew York, seeking foreclosure of the

Property. Complaint ir 45; Hundertmark Aff. ir 41. The Borrowers admitted all relevant facts in

their Answer to the foreclosure complaint, and on June 21, 2010, the District Cour entered a

Judgment of Foreclosure and Sale of the Property in the amount of $3,667,00,000 in favor of the

Senior Lenders. Complaint ir 47; Hundertmark Aff. ir 41. The amount due and owing to the

Plaintiffs under the Notes, the Amended Mortgage and the Senior Loan Documents is in e)Ccess

of$3.66 Bilion (the "Indebtedness"). Complaint ir 48; Hundertmark Aff. ir 42.

7 By letters dated January 11, 2010, Wachovia, in its capacity as Administrative Agent for the Mezzanine 1-3
Lenders, notified the Senior and Junior Lenders that the Mezzanine 1-3 Borrowers' failure to make the required
payments of interest due on January 8, 2010 constituted Events of Default pursuant to their respective Mezzanine
notes and loan agreements and that, if the defaults were not cured within the required cure period, the Mezzanine 1-3
Lenders intended to pursue their rights and remedies under their respective loan agreements, including the
commencement of "an Equity Collateral Enforcement Action ((as defined in the Intercreditor Agreement)) through a
non-judicial foreclosure sale of the Equity Collateral securing the Mezzanine (1-3) Loan(s) under the Uniform
Commercial Code" (the "Mezzanine 1-3 Loans Default Notices"). Complaint ir 44; Hundertmark Aff. ir 45.

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 PSW's Attempt to Seize Control

On or about August 6,2010, the Initial Mezzanine 1-3 Holders purorted to transfer their

ownership interest to PSW, a joint venture formed on July 30, 2010.8 The partners of this joint

venture include Winthrop Realty Trust and affiiates of Pershing Square Capital Management.

Complaint ir 49; Hundertmark Aff. ir 47. PSW purortedly acquired the Mezzanine 1-3 Loans,

which have a combined face value of $300 milion, for appro)Cimately 15 cents on the dollar.

Complaint ir 53; Hundertmark Aff. ir 51. As a condition to this acquisition, PSW agreed to be

bound by the terms of the Intercreditor Agreement and signed a certification attesting to same.

Complaint ir 52; Hundertmark Aff. ir 50. One day later, on August 7, 2010, counsel to PSW

noticed its intent to sell all of the right, title and interest in the Equity Collateral at aUCC public

sale scheduled for August 25, 2010. Complaint irir 54-55, 58-61; Hundertmark Aff. irir 52-57.

Since the notice was published, PSW has made it eminently clear that it wil act outside the terms

of the Intercreditor Agreement notwithstanding its certification that it would comply.

On August 10,2010, counsel for the Senior Lenders wrote PSW to confirm that: (1) PSW

was a Qualified Transferee given its brief corporate e)Cistence, and (ii) PSW had an obligation to

cure the Senior Loan default by paying the $3.66 Billon due under the loan as a condition to any

acquisition/transfer of the Equity Collatera1.9 Complaint ir 67; Hundertmark Aff. ir 60. The

following day, on August 11, 2010, PSW e)Ccoriated counsel for CWCAM and flat-out

challenged the plain and unambiguous language of Section 6(d):

8 The Mezzanine 1 -3 Loans were owned by AlB Debt Management Limited, Deutsche Genossenschafts-
Hypothekenbank AG, Harford Fire Insurance Company, Hartford Life Insurance Company, Concord Real Estate
CDO 2006-1 LTD, and Wachovia, (collectively, the "Initial Mezzanine 1-3 Holders") (Certification Documents).
complaint ir 22; Hundertark Aff. ir 22.
9 Specifically, CWCAM wrote: "Section 6( d) of the Intercreditor Agreement requires that to the extent the Equity
Collateral is acquired by a transferee, all defaults under (i) the Senior Loan and (2) the applicable Senior Junior
Loans must be cured by such transferee as of the date of acquisition. This requirement applies equally to a credit bid
by PSW. As a result of the acceleration of the unpaid debt outstanding under the Senior Loan, Section 6( d) of the
Intercreditor Agreement requires the full payment of the unpaid debt as a condition to any transferee acquiring the
Equity Collateral that PSW is proposing to selL."

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 Lastly, your statements about Section 6(d) of the Intercreditor Agreement are,
as you must know, ludicrous. You are entitled to no such assurances in any
event. Your cited provision o(the Intercreditor Agreement does not require the
payment o(the Senior Loan as a condition to a transferee acquiring the Equity

eollateral. Your contrary interpretation is totally without merit or foundation

and a poor and ultimately unsuccessful effort to intimidate my client.

Complaint ir 68; Hundertmark Aff. ir 61 (emphasis added).

PSW has also made clear its intention to violate and render moot material provisions of

the Intercreditor Agreement by improperly soliciting a banptcy fiing. Myriad press reports,

including reports based upon interviews with the principals ofPSW's joint ventue partners, have

consistently indicated that PSW intends to acquire the Equity Collateral on August 25 through a

credit bid without paying off the Senior Loan and place the Borrowers into banptcy to

discharge the obligation. See I1aina Jonas, "Ackman on Path to Own NYC's Stuyvesant Town,"

REUTERS (Aug. 9, 2010); Charles V. Bagli, "Defaults Fail to Scare Suitors for 2 East Side

Comple)Ces," N.Y. TIMES (Aug. 9, 2010); Danielle Reed, et. aI., "Stuyvesant Town mezz lenders

Pershing and Winthrop plot Chapter 11," DEBTWlRE (Aug. 10, 2010); Lingling Wei, "Buyers

Jockey for Stuyvesant," WALL ST. JOURNAL (Aug. 10,2010). Indeed, PSW, and its hedge fud

parners, are curently represented by bankptcy counsel and have informed counsel for the

Senior Lenders that Kirkland & Ells has been hired as banptcy counsel for the PCV 1ST

Borrowers once the UCC foreclosure sale is complete. Complaint ir 66; Hundertmark Aff. ir 65.

ARGUMENT

In order to obtain a preliminar injunction, Plaintiffs must demonstrate: (1) the likelihood

of success on the merits; (2) that irreparable injur wil result without a preliminar injunction;

and (3) that a balancing of the equities, which includes the public's interest, favors the Plaintiffs'

position. Seitzman v. Hudson River Assocs., 126 A.D.2d 211, 213, 513 N.Y.S.2d 148, 149 (lst

Dep't 1987). See also Ale)Candru v. Pappas, 68 A.D.3d 690, 690, 890 N.Y.S.2d 593, 594 (2d

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Dep't 2009) (e)Cplaining that Plaintiffs need only make a prima facie showing of their right to
10
relief).

I. Plaintiffs Are Likely To Succeed In Their Declaratory Judgment Action

New York cours have consistently held that Junior Lenders must comply with the terms

of loan documents and specifically intercreditor agreements. See In re Westpoint Stevens, Inc.,

600 F.3d 231, 254 (2d Cir. 2010) (holding that junior lenders are bound by terms of the

intercreditor agreement, and that the original distribution of securities to the junior lenders

violated the agreement because the senior lenders had the right to be satisfied in full and in cash

before the junior lenders received a distribution of securities); Highland Park v. Wells Fargo

Ban, No. 08 Civ. 5723 (NRB), 2009 WL 1834596, at ** 3, 5 (S.D.N.Y. June 16,2009) (holding

that mezzanine lender bound by the terms of the intercreditor agreement and dismissing the

mezzanine lender's claim because it did not comply with its terms); Ion Media Networks, Inc. v.

Cyrus Select Opportities Master Fund, Ltd. (In re Ion Media Networks, Inc.), 419 B.R. 585,

594 (Ban. S.D.N.Y. 2009) (holding that the language in the intercreditor agreement was "plain

and puroseful" and that the second lien lender was bound by the agreement and violated it).

See also In re Suncruz Casinos, 298 BR. 833, 846 (Bank. S.D. Fl. 2003) (holding that junior

holders were contractually prohibited from asserting a claim until the senior lenders were paid in

full). As a Junior Lender itself, PSW is indisputably bound by the terms of the Intercreditor

Agreement.

This Cour is authorized to enter a declaratory judgment, declaring the rights and

obligations of the paries to a justiciable controversy. See C.P.L.R. § 3001. "The primary

purpose of declaratory judgments is to adjudicate the paries' rights before a 'wrong' actually

10 To obtain a temporary restraining order, the Plaintiffs must demonstrate that immediate and ireparable harm wil
result unless the defendant is restrained before a hearing can be held. See N.Y. C.P.L.R. § 6313 (McKiney 2010).

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occurs in the hope that later litigation wil be unnecessary." N.Y. County Lawyers' Ass'n v.

State ofN.Y., 294 A.D.2d 69, 74, 742 N.Y.S.2d 16,20 (1st Dep't 2002) (quoting Klosterman v.

Cuomo, 61 N.Y.2d 525, 538, 463 N.E.2d 588, 595 (1984)). The purose of making the

requested declaration is to stabilize the legal relations and eliminate uncertainty as to the scope

and content of present or prospective obligations. See Bar v. Ready Reference Pub. Co., 25

A.D.2d 827, 269 N.Y.S.2d 665 (1st Dep't 1966).

To succeed on a cause of action for declaratory judgment, Plaintiffs must show that there

is a valid interest in securing a declaration and a present, in an adversary context, controversy

with the defendant concerning that interest. See Phelan v. City of Buffalo, 54 A.D.2d 262, 264-

5, 388 N.Y.S.2d 469, 471-472 (4th Dep't 1976). Declaratory judgment actions are appropriate

where "the practical likelihood is that the future contingency wil occur. . . ." Prodell v. State,

211 A.D.2d 966, 967-68, 621 N.Y.S.2d 712, 713 (3d Dep't 1995) (citing Cuomo v. Long Island

Light Co., 71 N.Y.2d 349, 354, 520 N.E.2d 546 (1988)). Of utmost importance here, "(a)

declaratory judgment action may be an appropriate vehicle for settling justiciable disputes as to

contract rights and obligations." Kalisch-Jarcho, Inc. v. City ofN.Y., 72 N.Y.2d 727,731,533

N.E.2d 258, 260 (1988); see also Babcock & Wilco)C Co. v. Control Components, Inc., 161 Misc.

2d 636, 614 N.Y.S.2d 678, 683 (Sup. Ct. N.Y. County 1993). A preliminar injunction is

appropriate to preserve the status quo to "assure the efficacy of any declaratory judgment."

M&A Oasis, Inc. v. MTM Assocs., L.P., 307 A.D.2d 872, 872-73, 764 N.Y.S.2d 9 (1st Dep't

2003).

Plaintiffs' declaratory judgment action seeks nothing more than to ensure that PSW, a

Junior Lender, complies with the plain and ordinary meaning of clearly delineated provisions in

the Intercreditor Agreement. Specifically, Plaintiffs ask the Cour to declare that: (i) Section

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6(d)(B)(1) and (2) require PSW, or any purchaser of the auctioned Equity Collateral, to cure all

Senior Loan defaults prior to acquiring the Equity Collateral; and (ii) Section 11 (d)(ii) prohibits

PSW from orchestrating a Borrowers bankptcy unless the Senior Loan is paid off in fulL.

A. PSW Canot Acquire the Equity Collateral Through a Credit Bid Without Satisfying
the Conditions of Section 6(d)(B) of the Intercreditor Agreement

Sections 6(d)(B)(1) and (2) of the Intercreditor Agreement unambiguously obligate PSW

to cure all defaults under the Senior Loan in connection with PSW's acquisition of the Equity

Collateral:

To the extent that any Qualifed Transfereell acquires the Equity

eollateral pledged to a Junior Lender pursuant to the Junior Loan
Documents in accordance with the provisions and conditions of
this Agreement. . . . provided, however, . . . . (B) all defaults
under (1) the Senior Loan and (2) the applicable Senior Junior
Loans, in each case which remain uncured or un waived as of the
date of such acquisition have been cured by such Qualifed
Transferee. . . . .

Complaint ir 30; Hundertmark Aff. ir 30. In this case, that means PSW is required to pay the

$3.66 Bilion that is due and owing under the Senior Loan in the event PSW acquires the Equity

CollateraL. Yet, PSW has renounced any intent to pay these monies to the Senior Lenders.

PSW's August 11 letter characterizes the Senior Lenders' assertion that these amounts were

owing as "ludicrous," and in the same letter, flatly rejects any obligation to make assurances that

they would be paid. Complaint ir 68; Hundertmark Aff. ir 61. PSW's obvious intent is to

discharge any obligation that arises in banptcy. Injunctions are routinely entered in the face

of this type of anticipatory breach. See,~, Scudder v. Zeckendorf Hotels Corp., 224 N.Y.S.2d

432,432-33 (Sup. Ct. N.Y. County 1961) (holding that plaintiffs motion for injunction against

anticipatory breach was proper because money damages obtainable after the breach would not

11 A Junior Lender is a Qualified Transferee under the Intercreditor Agreement. See Intercreditor Agreement,
Section l(a), Derinition of Qualified Transferee, at p. 23, attched as Exhibit E to the Hundertark Aff.

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 suffice to make plaintiff whole); Gusinky v. Genger, No. 600426/2008,2009 WL 2534670, at **

3, 5-6 (Sup. Ct. N.Y. County, Aug. 12, 2009) (granting plaintiffs motion for a preliminary

injunction which was brought as a result of defendant's anticipatory breach of a contract.); Swift

& Co. v. United States, 276 U.S. 311, 326 (1928) (finding that a "suit for an injunction deals

primarily, not with past violations, but with threatened future ones; and that an injunction may

issue to prevent future wrong, although no right has yet been violated"); Consol. Container Co.

v. Warren Unilube, Inc., No. 05-2371 B, 2006 WL 522424, at **1, 3, 9 (W.D. Tenn. March 3,

2006) (granting plaintiff a preliminar injunction to enjoin the defendant from terminating an

agreement after defendant stated his intent to terminate the contract in advance of the end date).

In fact, New York goes fuher finding that Section 6( d)(B)(1) and (2) create an e)Cpress

condition precedent to any sale of the Equity CollateraL. When the word "provided" precedes a

clause in question, it creates an e)Cpress condition precedent. See Nat'l Fuel Gas Distrib. Corp. v.

Harford Fire Ins. Co., 28 A.D.3d 1169, 1169, 814 N.Y.S.2d 436,437 (4th Dep't 2006) (holding

that where clause "follows the word ¡PROVIDED' ¡it) indicates the creation of a condition")

(citing Restatement (Second) of Contracts § 226, Comment a)) (emphasis added). Accord Israel

v. Chabra, 537 F.3d 86, 93 (2d Cir. 2008) (noting that "the word ¡provided' placed immediately

before a contractual requirement ¡indicates the creation of a condition"') (quoting Nat'l Fuel

Gas, 28 A.D.3d at 1170) (emphasis added); see also Ginett v. Computer Task Group, 962 F.2d

1085, 1100 (2d Cir. 1992) ("Parties often use language such as . . . 1Jrovided that' . . . to make

an event a condition. . . .") (emphasis added). "A condition precedent is an act or an uncertain

event that must occur before the agreement of the parties becomes operative." Thor Props.,

LLC v. Chetrit Group, LLC, No. 650514-09, 2010 WL 1740752, at *4 (Sup. Ct. N.Y. County

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2010) (emphasis added).12 As a result, PSW canot proceed with its planed UCC foreclosure

sale unless any acquisition of the Equity Collateral is conditioned on payment to the Senior

Lenders of the $3.66 Bilion that is curently owed to them. See 511 9th LLC v. Credit Suisse

USA, Inc., 69 A.D.3d 497, 498, 894 N.Y.S.2d 385, 385 (1st Dep't 2010) (holding pary had no

right under financing agreement because they could not show that conditions precedent were

satisfied); Ferramosca v. Nelrak, Inc., 250 A.D.2d 807, 808, 673 N.Y.S.2d 712, 713 (2d Dep't

1998) (holding in foreclosure action that part's rights under note did not accrue because the

condition precedent in note was not fulfilled); see also Anecca Inc. v. Le)Cent, Inc., 307 F. Supp.

2d 999, 1005 (N.D. Il. 2004) (applying New York law in holding that "courts should be wary of

reorganizing or e)Ccusing e)Cpress conditions precedent and thereby upsetting the wil of the

. ")
paries. . .. .

As fuher evidence that Section 6( d) constitutes a condition precedent, the language

therein e)Cpressly limits which defaults can be cured following the acquisition of the Equity

Collateral: "or in the case of defaults that can only be cured by the Junior Lender following its

acquisition of the Equity Collateral. . . ." Complaint ir 30; Hundertmark Aff. ir 30. Here, the

default e)Cisting under the Senior Loan (e.g., the total outstanding indebtedness of the Senior

Loan) is not a default that can only be cured by the Junior Lender following its acquisition of the

Equity Collateral; rather, it is a default that can and must be cured as a condition to acquiring the

Equity CollateraL.

12 Preferred Mortg. Brokers, Inc. v. Byfield, 282 A.D.2d 589,590 (2d Dep't 2001) ("Express conditions precedent,
which are those agreed to and imposed by the parties themselves, 'must be performed literally."') (quoting
Oppenheimer & Co. v. Oppenheim, AppeL, Dixon & Co., 86 N.Y.2d 685, 690, 660 N.E.2d 415,418 (1995) ("A
condition precedent is an act or event, other than a lapse of time, which . . . must occur before a duty to perform a
promise in the agreement arises.").

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 Given the unambiguous language of Section 6( d), Plaintiffs are likely to succeed on the

merits of their declaratory judgment action as it pertains to this provision of the Intercreditor

Agreement.

B. . PSW Canot Solicit, Direct, Cause, or Take Any Action in Furtherance of

Banptcy When the Senior Loan is Outstanding

The restraints against banptcy in the Intercreditor Agreement are absolutely clear.

Section 11 (d)(ii) of the Intercreditor Agreement provides:

(ii) For as long as the Senior Loan shall remain outstanding, none of
the Junior Lenders shall solicit, direct or cause Borrower or any other
entity which eontrols Borrower (the "Borrower Group'~ or any other
Person to: (1) commence any Proceeding against Borrower or any SPE
Constituent Entity; (2) institute proceedings to have Borrower or any SPE
Constituent Entity adjudicated a banpt or insolvent; (3) consent to, or
acquiesce in, the institution of bankruptcy or insolvency proceedings
against Borrower or any SPE eonstituent Entity; (4) file a petition or
consent to the fiing of a petition seeking reorganization, arrangement,
adjustment, wind-up, dissolution, composition, liquidation or other relief
by or on behalf of Borrower or any SPE Constituent Entity. . . or (9) take
any action in furtherance of any of the foregoing.

Complaint ir 33; Hundertmark Aff. ir 33 (emphasis added). Despite this clear prohibitory

language, there are press reports of conversations with the principals of PSW openly discussing

plans to fie bankptcy while the Senior Loan is outstanding. Complaint ir 65; Hundertmark

Aff. ir 59. Indeed, PSW has freely admitted that it has contacted and retained Kirkland & Ellis to

represent the Borrowers in a nonconsensual banptcy. Complaint ir 66; Hundertmark Aff. ir

65.

Courts have enjoined junior mezzanIne lenders from acting outside the terms of

intercreditor agreements. See,~, Highland Park, 2009 WL 1834596, at *3-5 (granting senior

lender's application for injunctive relief against the junior mezzanine holder and holding that the

junior mezzanine holder was bared by the intercreditor agreement from enforcing the guaranty

on the mezzanine loan until the senior loan was repaid in full); In re Ionmedia Networks, Inc.,

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419 B.R. 585, 594-7 (Bank. S.D.N.Y. 2009) (holding that the junior lender was e)Cpressly

prohibited from challenging the priority or the validity of the senior lenders' claims). As with

Section 6( d) of the Intercreditor Agreement, Plaintiffs are likely to succeed on the merits of their

declaratory judgment action as it pertains to the requirements of Section 11 (d)(ii) of the

Intercreditor Agreement.

II. Plaintiffs Have No Adequate Remedy At Law And Wil Be Irreparably Harmed
Absent Injunctive Relief.

The cour has fle)Cibility to apply the standards for a preliminary injunction, including

irreparable har, based on the underlying realties of each individual situation. Bashein v.

Landau, 96 A.D.2d 479, 479, 465 N.Y.S.2d 178, 179 (1st Dep't 1983) (granting a preliminary

injunction to restrain attorney from distributing escrow fuds because the mere possibility for

monetary recovery was not a sufficient reason to disturb the status quo). In this instance, the

absence of an adequate remedy at law was acknowledged between the Senior Lenders and the

Junior Lenders at the inception of the loan. Section 34 of the Intercreditor Agreement e)Cpressly

states that "monetary damages are not an adequate remedy to redress a breach by the other

hereunder and that a breach by any party hereunder would cause irreparable harm."

Complaint ir 35; Hundertmark Aff. ir 35.

The plain language of Section 34 should be honored by this Court:

It is a basic contract principle that 'when the paries set down their agreement in a
clear, complete document, their writing should. . . be enforced according to its
terms. We have also emphasized this rule's special import in the context of real
property transactions, where commercial certainty is a paramount concern, and
where the instrument was negotiated between sophisticated, counseled business
people negotiating at ar's length.'

TAG 380 LLC v. ComMet 380, Inc., 10 N.Y.3d 507, 512-13, 890 N.E.2d 195 (2008) (quoting

Vt. Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 475 (2004) (internal citations

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omitted)). See also Ikon Office Solutions, Inc. v. Usherwood Office Tech., Inc., 21 Misc. 3d

1144A, 2008 N.Y. Slip Op. 52499(U), * 17 (Sup. Ct. Albany County 2008); Ticor Title Ins. Co. v.

Cohen, 173 F.3d 63, 69 (2d Cir. 1999) (stating that contractual provision that non-breaching

part would be entitled to injunctive relief because the breach would cause irreparable har

could be viewed as an admission that plaintiff wil suffer irreparable har); Roswell Capital

Parners LLC v. Alt. Const. Techs., No. 08 Civ. 10647(DLC), 2009 WL 222348, at * 17

(S.D.N.Y. Jan. 30, 2009) (finding irreparable har based on the contractual admission of
irreparable harm and other factors) (citing N. Atl. Instruents, Inc. v. Haber, 188 F.3d 38, 49 (2d

Cir. 1999) (affirming preliminar injunction based in par on acknowledgment in agreement that

a breach would cause irreparable injur). Here, the Senior Lenders and Junior Lenders

specifically contemplated the irreparable harm that would result from a breach of the

Intercreditor Agreement and agreed that monetary damages would not serve as an adequate

remedy at law. As this agreement constitutes a clear and complete statement of their intent,

Section 34 should be enforced according to its terms.

The Intercreditor Agreement reflects the reality of the situation. The Property in question

is owned by a single purpose entity that owns no other assets. The Trust can only look to the

value of the Property to recover the more than $3.66 Bilion that it is owed. With more than

11,000 units, 25,000 residents, and roughly 550 employees, transferring control of the Propert

must be done deliberately and without the destruction and uncertainty caused by intercreditor

disputes. Indeed, it has taken the Senior Lenders and the Borrowers more than nine months to

simply prepare for an ordinar transfer of management of the Property following foreclosure.

For precisely these reasons, the parties agreed to a specific mechanism for the enforcement of

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remedies and an ordering of priorities. There is no preferable remedy short of an injunction that

wil protect the Senior Lenders from a wilful violation of the Intercreditor Agreement.

New York cours have also routinely recognized that the loss of the bargained-for

contractual right of control constitutes irreparable har. CanWest Global Commc'ns. Corp. v.

Mirkaei Tikshoret Ltd., 9 Misc. 3d 845, 872, 804 N.Y.S.2d 549, 570-71 (Sup. Ct. N.Y. County

2005); Wisdom Import Sales Co., LLC v. Labatt Brewing Co. Ltd., 339 F.3d 101, 114-115 (2d.

Cir. 2003) (holding that the denial of plaintiffs minority rights of corporate governance cannot

be remedied monetarily); Citibank, N.A. v. Nyland (CF8) Ltd., 839 F.2d 93, 97 (2d Cir. 1988)

(holding the ban would be irreparably harmed should it not be able to appoint a receiver to
control and manage the subject property after the default of a mortgage loan and granting

preliminary injunction); Audubon Levy Investors, LP v. East West Realty Ventures, LLC, 698 F.

Supp. 2d 328, 332-33 (E.D.N.Y. 2010) (agreeing that a loss of bargained-for managerial control

over an entity constitutes irreparable harm).

In Oracle Real Estate Holdings i, LLC v. Adrian Holdings Co. I LLC, the paries entered

into a contract for purposes of developing real estate, and shortly thereafter the defendant

defaulted on its loan obligations. 582 F. Supp. 2d 616, 624 (S.D.N.Y. 2008). The cour granted

a preliminary injunction to enforce plaintiffs' bargained-for right of corporate control at the

occurrence of the default and to prevent defendant from taking any action in regard to the equity

that could har its rights of recovery, including liquidating, reorganizing or transferring the

assets. Id. at 624. As the court in Oracle Real Estate reasoned, the bargained-for right to

corporate control is a valuable asset that could be meaningless at the end of litigation absent

injunctive relief. Id. at 626. (noting that the skil and resources of people e)Cercising control in

real estate transactions affects the value and prospects of the land) (emphasis added).

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 The Senior Lenders seek to preserve their contractually bargained-for rights and

obligations under the Intercreditor Agreement. In e)Ctending the Senior Loan, the Senior Lenders

e)Cpressly bargained with the Junior Lenders that the Junior Lenders would be prohibited from

acquiring ownership and control of the Equity Collateral unless and until any and all outstanding

Indebtedness under the Senior Loan was fully paid. This is a material term in the Intercreditor

Agreement, which was negotiated by sophisticated, counseled business people. The purose of

these bargained-for provisions was to ensure that ownership of and control over the Equity

Collateral was not transferred from the Junior Borrowers (controlled by Tishman) to the Junior

Lenders at a time when the Senior Loan was in default. If PSW is permitted to, in effect, seize

ownership and control of the unique real propert known as Stuyvesant Town and Peter Cooper

Vilage in contravention of the e)Cpressly bargained-for provisions of the Intercreditor

Agreement, the Plaintiffs wil be irreparably hared.

As in Oracle Real Estate, the control of the PCV 1ST property is a specifically bargained

for and valuable contractual right. Oracle Real Estate, 582 F. Supp. 2d at 626. Plaintiffs

bargained for and contracted for the Junior Borrowers to control the Equity Collateral while the

default under the Senior Loan is outstading. As such, any loss of this control is in violation of

the Intercreditor Agreement and would constitute irreparable harm to Plaintiffs.

Finally, Plaintiffs will suffer additional irreparable har if an injunction is not granted

because PSW, given its brief corporate e)Cistence, is likely not capable of compensating Plaintiffs

in.money damages equivalent to the $3.66 Bilion that is at risk. See Trustees of the Plumbers

Local Union NO.1 Welfare Fund v. Manattan Plumbing Corp., No. 08 CV 3036(FB)(RML),

2009 WL 5821676, at *12 (E.D.N.Y. Oct. 8, 2009); (noting that injunctive relief has been

granted where the collection of money damages is unlikely); see also Netwolves Corp. v.

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Sullivan, No. 00 CIV. 8943(AGS), 00 CIV. 9628(AGS), 2001 WL 492463, at *11 (S.D.N.Y.

May 9, 2001) (holding that were defendant may become insolvent "monetar injur is deemed

irreparable because the plaintiff may never be able to recover damages") (citing Federated

Strategic Income Fund v. Mechala Group Jamaica Ltd., No. 99 Civ. 10517, 1999 WL 993648, at

*8 (S.D.N.Y. Nov. 2, 1999) (e)Cplaining that, in situations where the defendant is insolvent or

insolvency is threatened, "preliminary injunctive relief may be necessary because, while

monetary damages may be theoretically available, 'as a practical matter, the defendant would not

or could not respond fully for those damages."'). As with PSW's refusal to offer any assurances

that it wil cure the Senior Loan default by paying it off in full, PSW has no assets to offer any

assurances that it is even capable of satisfying a billon dollar judgment.

III. A Balancing Of The Equities Tips In Favor Of Plaintiffs.

When balancing the equities, a cour weighs the harm each side wil suffer in the absence

or face of injunctive relief. See Lipsztein v. Mount Sinai Hosp., 170 A.D.2d 285, 286, 565

N.Y.S.2d 812 (1st Dep't 1991); Mr. Natual, Inc. v. Unadulterated Food Prods., Inc., 152 A.D.2d

729, 730, 544 N.Y.S.2d 182, 182 (2d Dept. 1989) (holding that the balance of the equities tips in

favor of plaintiff since there is no assurance plaintiff wil stay in business absent the injunction

while defendant likely wil not be inconvenienced). The balance of equities tips in favor of the

pary trying to maintain the status quo. Gramercy Co. v. Benenson, 223 A.D.2d 497, 498, 637

N.Y.S.2d 383,384 (1st Dep't 1996).

Here, the balance of the equities tips decidedly in favor of the Plaintiffs. The Senior

Lenders seek to do nothing more than to hold PSW, as a Junior Lender, to its contractually

bargained-for obligations under the Intercreditor Agreement. See~, Ikon Office Solutions,

Inc., No. 9202-08, 2008 N.Y. Slip Op. 52499U, at * 17 (holding that the balance of equities tips

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in favor of plaintiff merely seeking to enforce provisions of employment contracts against former

employees). Should the injunction not be granted, Plaintiffs wil lose what they contractually

bargained for and wil likely be left to the vagaries of the banptcy process with a breach of

contract action against a shell entity in PSW. In contrast, PSW's position wil not be changed. It

wil simply remain bound by the terms of the Intercreditor Agreement into which it freely

entered.

In balancing the equities, the court also considers the public interest involved. Seitzman

v. Hudson River Assocs., 126 A.D.2d 211, 214-15, 513 N.Y.S.2d 148, 150 (1st Dept. 1987).

This policy advances predictable and more efficient commercial outcomes and minimizes the

potential for wasteful litigation. The cour in In re Ion Media Networks, Inc., 419 B.R. 585, 595

(Bank. S.D.N.Y. 2009) observed that the plain language of the intercreditor agreement
"reinforces general principles of public policy," including the principle that "(t)he sophisticated

paries who entered into the Intercreditor Agreement were certainly aware" of the agreement's

provisions placing the junior lenders, including PSW, in an indisputably subordinate position.

As such, "clear and complete writings should generally be enforced according to their terms" to

impar stability in commercial transactions. W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d

157, 162, 566 N.E.2d 639, 645 (1990); Wallace v. 600 Parners Co., 86 N.Y.2d 543, 548, 658

N.E.2d 715, 720 (1995). This rule applies equally here, and the public interest tips in favor of

Plaintiffs.

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 CONCLUSION

F or the reasons set forth herein, Plaintiffs respectfully request that this Cour grant their

motion for a preliminary injunction and award Plaintiffs such other and fuher relief that this

Court deems just and proper.

Dated: New York, New York

August 18, 2010

Respectfully submitted,

VENABLELLP

By: slDavid E. Rice

Gregory A. Cross (pro hac vice pending)
David E. Rice
750 East Pratt Street, Suite 900
Baltimore, Maryland 21202
Telephone: (410) 244-7400

Michael K. Madden
Rockefeller Center
1270 Avenue of the Americas, 25th Floor
New York, New York 10020
Telephone: (212) 307-5500

Attorneys for CWCapital Asset Management

LLC, Solely in Its Capacity as Special
Servicer

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BA2/39851l