Magazine article Newsweek

In the Red in Greenwich

Magazine article Newsweek

In the Red in Greenwich

Article excerpt

A landlord tries to evict Long Term Capital

To business junkies, LTCM stands for Long Term Capital Management, that now infamous hedge fund that got a $3.65 billion federally orchestrated bailout last fall. But LTCM has now taken on a second meaning: Landlord-Tenant Commercial Muckfight. Because, you see, LTCM--or, to be precise, LTCM's management company--is involved in a dispute with its landlord that shows how even the simplest things can be made so complicated they make your teeth hurt.

Last week the landlord's lawyer, David Rosner, served an eviction notice on LTCM, seeking to oust the firm from its tony quarters at Osprey House in downtown Greenwich, Conn. Talk about comedowns. Last fall LTCM, a firm featuring "Masters of the Universe" traders and Nobel laureates, was playing high-stakes financial poker with 15 of the world's biggest financial institutions in the offices of the New York Federal Reserve Bank. Now the Masters of the Universe are being summoned to somewhat less august environs: housing court. To think of it is to giggle.

For LTCM, everything, it seems, is an opportunity for making things complicated. Witness this dispute, involving less than $3 million, penny ante for people who regularly trade billions. Here's what's going on. LTCM, which is not only Osprey House's sole tenant but also its mortgage holder, hasn't paid a penny of its $1.5 million annual rent since moving into the building in 1997. Its less-than-convincing explanation: the landlord never fixed a water leak in the basement, and hence no rent was due. Rosner says LTCM is misreading the lease and has stopped the landlord from making the repairs. But whatever shortcomings Osprey House may have, LTCM has managed to inhabit the place. Rent- free.

The landlord, who has taken a bath on the building since buying it 10 years ago, put it into bankruptcy in 1995. …

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