GMACCM Sues Over WTC-Backed CMBS

GMAC Commercial Mortgage, Horsham, Pa., has filed a lawsuit against the Port Authority of New York and New Jersey and certain other parties to protect the interests of investors in a $563 million commercial mortgage-backed securities deal that was backed by the World Trade Center.GMACCM had made a $563 million mortgage loan to developer Larry Silverstein for purchasing a 99-year lease on the twin World Trade Center towers, as well as WTC 4 and WTC 5. CMBS bonds backed by the properties were then issued by Wells Fargo as trustee, with GMACCM acting as the servicer. In the complaint filed in the Supreme Court of New York, the commercial mortgage lender is alleging (in its capacity as servicer) that the Port Authority, together with the Lower Manhattan Development Corp. and the Silverstein parties, have violated the rights of the lender under the loan agreement "to be secure with respect to the payment of all principal and interest due under the loan agreement." GMACCM asserts that the Port Authority is not entitled to recover the first $1.5 billion of insurance proceeds on the WTC properties because the properties are going to be restored. Moreover, the defendants have taken steps toward rebuilding the properties without getting GMACCM's consent. In a written statement, Silverstein Properties said, "It is incumbent upon everyone involved to sit down and try to solve GMAC's issues in a way that will enable us to proceed without delay in rebuilding the World Trade Center."