When Tishman Speyer Properties and BlackRock Realty acquired Stuyvesant Town-Peter Cooper Village on Manhattan's lower East Side for $5.4 billion three years ago, it was billed as a marquee property purchase. But a recent New York Court of Appeals ruling against the developers threatens to unravel the deal and further roil a fragile commercial real estate finance market.

The properties were first opened in 1947 - many attracted GIs returning from the war - and they were borne of a state law designed to encourage slum clearance by private firms. The 11,000-unit complex, which was owned by an affiliate of MetLife, covered 80 acres and was popular with middle-income families. In the 1990s, 25,000 residents lived in the complex, according to published reports.

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