Lehman to Repurchase Loans to SunCal Projects
Friday, March 26, 2010
"By Linda Sandler
March 26 (Bloomberg) -- Lehman Brothers Holdings Inc., which is liquidating to pay creditors, said it will buy back loans it made to bankrupt real estate projects undertaken with California’s SunCal Cos. from the investment firm that is holding them.
The loans have a face value of more than $1 billion, Lehman said in a filing yesterday in U.S. Bankruptcy Court in Manhattan. Fenway Capital LLC acquired the loans as part of an repurchase agreement that drew Lehman into a court battle with SunCal, as the defunct investment bank sought to protect its stake in SunCal projects it financed.
Lehman said it also will end a $3 billion commercial paper note program with a Fenway unit that began in September 2008, just before Lehman filed for bankruptcy.
The notes were pledged to JPMorgan Chase & Co., and will revert to Lehman as a result of a settlement of claims with JPMorgan this month.
Kimberly Macleod, a Lehman spokeswoman, didn’t immediately respond to an e-mail asking how much the deals would cost the company.
Lehman has been trying to impose a reorganization plan on the California projects. SunCal, which has its own plan, said Lehman no longer owned the loans and so had no rights as a secured creditor. Lehman said in the filing the deal with Fenway, which require court approval, will end litigation over the SunCal repurchase agreement.
“ SunCal initiated the bankruptcy action for each of these Lehman-involved LLCs in January 2009 with the goal of obtaining new financing from another source and moving the projects forward,” SunCal spokesman Joe Aguirre said in an e-mail today.
The bankruptcy cases are In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan), and In re Palmdale Hills Property LLC, 8:08- bk-17206, U.S. Bankruptcy Court, Central District of California (Santa Ana). SunCal’s lawsuit is 8:09-ap-01005, U.S. Bankruptcy Court, Central District of California (Santa Ana).
--Editors: Charles Carter, Steve Farr "
Source
http://www.businessweek.com/news/2010-03-26/lehman-to-repurchase-loans-to-suncal-projects-correct-.html
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