Thursday, May 18, 2017

MSC 2007-IQ14: City View Center is resolved. Morgan Stanley eats some crow.

Long story short: City View Center ($84MM) was built on top of two landfills with a methane remediation system that did not work. Walmart moved in, it stank, Walmart moved out, and the borrower defaulted. The special servicer sued MSMC for repurchase, which has been kicking around in the courts for several years. From their comment below from this month's remittance, it appears that the case has been settled.

The Special Servicer, acting on behalf of the Noteholder/Trust, and Morgan Stanley Mortgage Capital Inc.('MSMC') have reached an agreement to settle in full the Trust's litigation relating to alleged breaches by MSMC of representation and warranty ma de to the Trust at the time of securitization. The settlement to the Trust of cash in the amount of $62.5 million has been completed and funded. Settlement terms include, among other standard terms, no admission of wrongdoing by either party and full mutual releases. The loan is now being marketed for sale.

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