NEW YORK, NY October 22, 2009 —A decision by the state's highest court is good news for tenants at Stuyvesant Town and Peter Cooper Village and a serious blow to their financially struggling landlord Tishman-Speyer. WNYC's Cindy Rodriguez has this report:

REPORTER: In a 4-to-2 decision the panel of judges found that owners were raising rents to market rates while receiving what's called a j-51 tax credit. According to state rules, the decision says the apartments should have remained rent regulated. The plaintiffs in the case say more than $200 million are owed to thousands of tenants. Today's ruling could be dire for Tishman-Speyer who along with BlackRock Realty paid $5.4 billion for this property on Manhattan’s East Side (it runs from 14th Street to 23rd). The high price tag meant the owners were counting on turning this bastion of middle class housing into high rent luxury apartments. But the business plan has failed so far and now the owners have nearly depleted their reserves and are near defaulting on their loans. In a statement, Tishman-Speyer said the ruling reverses 15 years of government practice and raises a number of issues yet to be resolved by the courts and government agencies. For WNYC, I'm Cindy Rodriguez.

Cindy Rodriguez will also be on today's Financial 411at 4:30 to discuss the ruling.