Question for My Readers .... Has the "deal" for Mark Walsh, Brett Bossung & Mark Newman to buy the management power in LBREP I, LBREP II and LBREP III really "closed" or is this deal still on hold" ?
Email Me at
Crystal@CrystalCox.com
"" EXECUTIVE SUMMARY
Lehman Brothers Real Estate Partners III, L.P. (together with its parallel funds, the “Fund” or
“LBREP III”) is a global real estate merchant banking fund being formed to continue Lehman
Brothers’ successful real estate investment activities.
The Fund is the third generation opportunistic real estate private equity fund of Lehman Brothers Holdings Inc. (“Lehman Brothers” or the “Firm”) and follows the success of Lehman Brothers Real Estate Partners II, L.P. (“LBREP II”), a $2.4 billion fund formed in December 2004, and its predecessor Lehman Brothers Real Estate Partners, L.P. (“LBREP I”), a $1.6 billion real estate fund formed in 2000 (together, the “LBREP Funds”). PSERS has committed previously to Lehman Brothers Real Estate Partners Funds I & II.
The Fund will be managed by Lehman Brothers Real Estate Associates III, L.P. The Fund is targeting total capital commitments of $4.0 billion for opportunistic real estate equity investments primarily in North America, Europe and Asia.
As
with the LBREP Funds, Lehman Brothers and its employees will make a substantial contribution
to the Fund, totaling at least the lesser of 20% of the total commitment and $800 million. This
significant investment substantially aligns the interests among Lehman Brothers and its
employees, the limited partners of the Fund and the management and employees dedicated to
the Fund.
The Fund will benefit from its position in the Real Estate Private Equity Group (“REPE”), an
integrated component of Lehman Brothers’ Global Private Equity business, headed by Michael
Odrich, and the Global Real Estate Group (the “Global Real Estate Group” or “GREG”), led by
Mark Walsh. The Fund will be Lehman Brothers’ primary vehicle for opportunistic investment in real estate and will be managed by Global Co-Heads, Brett Bossung and Mark H. Newman,each with over 18 years of industry experience. The close working relationship between REPE and GREG offers the Fund a unique opportunity to access the Firm’s deal flow globally and enjoy the benefit of the many relationships established by Lehman Brothers with real estate entrepreneurs around the world. '"
Full Document and Source
http://164.156.7.89/org/board/resolutions/2007/lehman_20071213.pdf
"" Mark was a Managing Director of Lehman Brothers, Head of the Global Real Estate Group, and a voting partner in all of Lehman's real estate private equity funds.
Mr. Walsh spent over twenty years with Lehman Brothers, where he oversaw the firm's distressed mortgage debt acquisitions, real estate equity and lending activities.
During his career at Lehman Brothers, Mr. Walsh oversaw the origination of more than $300 billion of commercial real estate debt and equity transactions (both for the firm and its private equity business).
Under his leadership, Lehman Brothers was a top ranked CMBS underwriter both globally and domestically and compiled a very successful equity investment track record. In addition to his responsibilities in Real Estate, Mr Walsh was a member of Lehman Brothers' Investment Committee, the Lehman Brothers' Management Committee and the Fixed Income Operating Committee.
Prior to joining Lehman Brothers, Mr. Walsh was a lawyer and represented financial market transactions. Mr. Walsh is also a Founding Member of the Ziman Center for Real Estate at UCLA and holds a B.A. from the College of the Holy Cross and a J.D. from Fordham Law a School. ""
Source
http://www.zoominfo.com/people/Walsh_Mark_8930637.aspx
"" ... Mark Walsh and Brett Bossung, to keeping a watch over what is going to happen with ownership of the general partner entity in Lehman Brothers Real Estate Partners I, Lehman Brothers Real Estate Partners II and Lehman Brothers Real Estate Partners III (all Delaware limited partnerships).
.... Lehman Brothers Holdings Chief Restructuring Officer, Bryan Marsal, acquiesced in the disclosure of information, roughly 9 months ago, saying that the general partner entities were going to be sold to Mark A. Walsh, Brett Bossung and Mark Newman. I think the purchase price was in the neighborhood of $10 Million to $15 Million.
... working to help communities harmed by environmental and public safety problems created by bankrupt lenders and bankrupt developers.
... Concerning Walsh, Bossung and Newman's purchase of LBREP I, LBREP II and LBREP III's general partner entities, .....
... stories speculated, in a veiled manner, that the sale was being held up by the New Jersey Attorney General's lawsuit against Dick Fuld, Mark A. Walsh and both Bossung and Newman if I remembered correctly, i.e. some of the limited partners were withholding their consents to the supposed "bad actors" Walsh, Bossung and Newman getting back in the LBREP drivers seats.
Through bankruptcy court, securities, and state pension agency filings, we've discovered that LBREP I, LBREP II, and LBREP III's limited partners are pension funds, investment funds and iindividuals, and that they own about 98% of each company, with the respective Lehman owned and affiliated general partner owning the other roughly 2% of each of LBREP I, LBREP II and LBREP III. (We're read that the general partners are named LBREA I, LBREA II and LBREA III.)
Even though neither LBREP I, LBREP II nor LBREP III are bankrupt, nor are the entities which are their general partners bankrupt, apparently about 6 months before the Lehman Brothers Holdings bankruptcy in September 2008, Walsh, Bossung, Newman, and a few other employees in their department at Lehman, decided to stop funding money to development projects in which LBREP II had invested, including many so called Lehman/SunCal entities' projects.
As a result, all of the Lehman/SunCal entities real estate got blistered with mechanics liens for unpaid subcontractor bills, and they all ended up in Chapter 11's...some involuntary Chapter 11's because Walsh, Bossung, Newman and Lehman's NY based bankruptcy lawyers wouldn't consent to the filing of voluntary bankruptcies.
All of the Lehman/SunCal related real estate entity bankruptcies are listed below FYI. There is very complicated litigation ongoing between SunCal and Lehman, as part of those bankruptcies as an adversary proceeding in the "In re Palmdale Hills" case, relating to the Lehman entities acting as equity owners (like LBREP II) and Lehman entities acting as mortgage lenders (like Lehman Ali and Lehman Commercial Paper, Inc.) failing to fund to pay pre-existing construction related bills. That mess is probably going to go on for several years.
The informal bankruptcy task force got involved in one of the Lehman/SunCal projects in bankruptcy, when Walsh, Bossung, Newman and pals failed to fund in excess of $15 Million to pay bills at a project called "Oak Knoll" in Oakland, CA.
The City of Oakland had issued an "abatement order" requiring the Lehman/SunCal entity controlled by LBREP II, and the bankruptcy trustee over the Oakland project to "Abate a Nuisance" in the form of a horrific fire hazard at the property....an "abatement order" which Bossung and Newman simply ignored.
... document called SunCal865 from the bankruptcy court, or do a search with the words Oakland, Oak Knoll, fire, Lehman and SunCal to see all the news stories, which were carried in the SF Chronicle, Oakland Tribune and a few national publications about the severe fire hazard. Also a local blog called www.ActionAlameda.org had good stories. The action on the fire hazard at the Oak Knoll project was happening between June 2009 and January 2010.
Bossung, Newman and pals running LBREP II were completely recalcitrant in coming up with the money to do the City-ordered fire hazard abatement work at Oak Knoll, and ultimately the Oakland City Attorney and Alameda County District Attorney apparently "convinced" Bryan Marsal (who is the CRO/CEO of bankrupt Lehman and thereby currently the boss of LBREA II's staff) and the bankruptcy trustee over the Oak Knoll project, that they were looking at jail time if they refused to come up with the money to abate the fire hazard. [Of course, we were not first hand participants in the meetings.
We got the information from the Oak Knoll bankruptcy trustee's timesheet entries.] As a result, Bryan Marsal and another partner in Alvarez & Marsal convinced another Lehman entity Marsal runs, Lehman Ali, Inc., to lend the money to the bankruptcy trustee to do the fire hazard abatement work at Oak Knoll under a first lien real estate secured loan to the trustee.
LBREP II's 90% indirect ownership interest in Oak Knoll is "out of the money" because a $150+ Million mortgage to Lehman Ali, Inc. is senior to it, and the extra $7.7 million in fire and asbestos hazard abatement work simply puts LBREP II further out of the money. However, kvetching by Walsh, Bossung & Newman on behalf of LBREP II's limited partners would not have been helpful in the process of resolving the Oak Knoll fire hazard abatement problem.
So far, all has ended well, because Bryan Marsal got the situation resolved before Walsh, Bossung & Newman bought LBREA I, LBREA II and LBREA III, i.e. before Walsh, Bossung & Newman could stick their finger in the bankruptcy case independently of Marsal, in the name of LBREP II, and try to screw things up on resolution of the fire hazard issue as a means of getting leverage on Lehman Ali, Inc.
However, our little group of "environmental/public safety bankruptcy problem solvers" are still shocked that the sale of those general partnership interests in LBREP I, LBREP II and LBREP III to Walsh, Bossung and Newman is really going to "close escrow", because of the New Jersey Attorney General's litigation.
.... Although the fire hazard abatement work is just about to physically start, at a cost of about $7.7 Million (including make-up payments to the asbestos demolition contractor), if the money provided by Lehman Ali, Inc.'s secured loan to the Oak Knoll trustee "runs short" or if other problems develop, Walsh, Bossung & Newman would end up being parties with an opportunity to gripe, on behalf of LBREP II, about further expenditures. So I guess you could say that the well-informed neighbors of the Oak Knoll project will not be thrilled to hear that Walsh, Bossung & Newman are going to get control of LBREP II's decision making free from Bryan Marsal's supervision.
..., the Lehman/SunCal bankruptcy case numbers,
all pending in the Central District of California are:
Earliest Involuntary Chapter 11 Cased Filed by Unhappy Mechanics Lien and Junior Mortgage Creditors, where Chapter 11 Trustee Now Controls Projects. All case in U.S. Bankruptcy Court, Central District of California, Santa Ana branch, Hon. Erithe Smith, Bankruptcy Judge:
LBREP/L-SunCal Master I LLC - Case No. 08-bk-15588-ES (Lead Case for Motion Filing Purposes)
LBREP/L-SunCal McAllister Ranch LLC - Case No. 08-bk-15637-ES (Bakersfield project)
LBREP/L-SunCal McSweeney Farms LLC - Case No. 08-bk-15639-ES (CA Inland Empire Project)
LBREP/L-SunCal Summerwind Ranch LLC - Case No. 08-bk-15640-ES (CA Inland Empire Project)
4 total.....These 4 cases have a Chapter 11 Trustee other than Steven Speier
Voluntary Chapter 11 Cases Filed by SunCal management. All case in U.S. Bankruptcy Court, Central District of California, Santa Ana branch, Hon. Erithe Smith, Bankruptcy Judge. Steven Speier is Ch. 11 trustee on involuntary cases:
Palmdale Hills Property, LLC - Case 8:08-bk-17206-ES (Lead Case for Motion Filing Purposes on All 26 Bankruptcies below)
SunCal Beaumont Heights LLC - Case 8:08-bk-17209-ES (Inland Empire Project)
SunCal Bickford Ranch LLC - Case 8:08-bk-17231-ES (Penryn, CA Project)
SunCal Communities I, LLC - 8:08-bk-17248-ES (Investment Entity)
SunCal Communities III, LLC - 8:08-bk-17249-ES (Investment Entity)
SunCal Emerald Meadows Ranch, LLC - 8:08-bk-17230-ES (Inland Empire Project)
SunCal Johannson Ranch, LLC - 8:08-bk-17225-ES (Inland Empire Project)
SunCal Summit Valley, LLC - 8:08-bk-17227-ES (Inland Empire Project)
SCC/Palmdale, LLC - 8:08-bk-17204-ES (Palmdale, CA project called Ritter Ranch)
Acton Estates, LLC - 8:08-bk-17236-ES (L.A. County project north east of Santa Clarita, CA)
Seven Brothers, LLC - 8:08-bk-17240-ES (Victorville Project)
SJD Partners, LTD - 8:08-bk-17242-ES (Investment Entity)
SJD Development Corp. - 8:08-bk-17249-ES (Investment Entity)
Kirby Estates, LLC - 8:08-bk-17246-ES (Inland Empire) ....................................................14 cases
First 4 of 9 Involuntary Cases Filed by SunCal management in Santa Ana to avoid Lehman consent problem :
SunCal Heartland LLC 08-bk-17407-ES (Riverside County Project)
LB/L-SunCal Oak Valley LLC 08-bk-17404-ES (Riverside County Project)
LB/L-SunCal Northlake LLC 08-bk-17408-ES (L.A. County Project in Castaic, north of Santa Clarita)
SunCal Marblehead LLC 08-bk-17409-ES (San Clemente, Orange County Project)................................4 cases
Second 4 of 9 Involunary Cases Filed by SunCal management on 11/14 in Santa Ana to avoid Lehman consent problem:
SunCal Century City, LLC Case 8:08-bk-17458-ES (City of Los Angeles Century City Project, Danske Bank as assignee of Lehman mortgage already OK'd to foreclose)
SunCal PSV, LLC - Case 8:08-bk-17465-ES ("Palm Springs Village" in Palm Springs Area)
SunCal Torrance Properties, LLC - Case 8:08-bk-17472-ES (Del Amo Fashion Center land, Torrance CA)
Delta Coves Venture, LLC - Case 8:08-bk-17470-ES (San Joaquin delta area near Sacramento, CA).................4 cases
More voluntary Chapter 11 cases filed on 11/19/08 in Santa Ana:
Tesoro SF, LLC - Case 8:08-bk-17523 (L.A. County Project north of Santa Clarita, CA)
SCC Communities LLC - Case 8:08-bk-17572 (San Bernardino Co., CA Project )
North Orange Del Rio Land, LLC Case 8:08-bk-17574 (City of Orange CA).......................3 cases
Last 1 of 9 involuntary Chapter 11 cases filed by SunCal management on 11/19/08 in Santa Ana:
SunCal Oak Knoll, LLC, Case 8:08-bk-17588 (Oakland, CA Project)...............................1 case,
30 Lehman/SunCal bankruptcy cases total as of 11/19/08. None filed thereafter. ""
Got a Tip on Lehman Brothers... Or anything in this Post...??
Email Me Crystal L. Cox Investigative Blogger at
Crystal@CrystalCox.com
Mark Walsh, of Lehman Brothers Executives, Lehman Property Funds, Bankruptcy Indescrestions - Corruption - Wall Street real estate dealmakers - the Walsh group - Brett Bossung and Mark Newman, co-heads of Lehman's real estate private equity division... any information, Tips -or Industry Whistleblowing Leads you got.. email them to my at Crystal@CrystalCox.com
Read more...""Mark Walsh is leading a team of Lehman Brothers executives who are close to taking over management of the bankrupt company's property funds, a move that would mark the return of one of Wall Street's biggest real estate dealmakers.
The largest limited partners in three funds with $7.2 billion of total equity signed off on transferring the management rights to the Walsh group after considering counteroffers from other fund operators, including AREA Property Partners of New York. It's unclear if the group will also be named operating partner of Lehman's two mezzanine-debt funds, which have $2.3 billion of total equity. The transfer is still subject to a vote by all of the funds' limited partners, who are expected to approve the hand off.
The Walsh team plans to relinquish the right to draw down $1.6 billion of uninvested capital from investors and focus on harvesting existing investments. It will also slash management fees. The fund's largest limited partners evidently were swayed by the team's familiarity with the assets and the fact that the group offered to manage them for less than the other bidders. Lehman declined to comment.
As head of Lehman's global real estate group, Walsh financed dozens of major property transactions during the real estate boom, supplying both equity and debt. He built a reputation as one of Wall Street's savviest and most aggressive real estate operators. But Lehman's mammoth $33 billion real estate portfolio was hammered by the downturn, contributing to the company's bankruptcy filing last September and leading to Walsh's departure.
Real estate players have been speculating about when they would see the re-emergence of Walsh, who was a 20-year Lehman veteran. The operation being formed by the Walsh team to manage the Lehman funds could eventually become an investment platform.
"This is very good for the investors because it brings Mark Walsh back to the market," said one veteran real estate player. "He has had his head down since the bankruptcy, but it is good for the market that he is back."
Joining Walsh are Brett Bossung and Mark Newman, co-heads of Lehman's real estate private equity division, who have continued to oversee the funds since the firm entered bankruptcy. The buzz is that the team also includes Kevin Dinnie and Rodolpho Amboss, both managing directors and principals in Lehman's fund shop.
But Michael McNamara announced in an e-mail to colleagues that he would resign as managing director and principal at the end of the month. He spent nine years in that position, with a focus on acquisitions. The buzz is that he decided against joining the new firm because the Lehman funds won't be making new investments. He plans to explore new opportunities.
The Walsh team would become general partners of three global property funds - the $1.6 billion Lehman Brothers Real Estate Partners 1, the $2.4 billion Lehman Brothers Real Estate Partners 2 and the $3.2 billion Lehman Brothers Real Estate Partners 3. Lehman will retain its equity stakes in the vehicles. The first two funds are fully invested, and the third fund is about half invested.
The management group will draw down a small amount of the $1.6 billion of uninvested capital in the third fund to support existing investments. But investors will be released from most of those commitments.
The management fee will be 0.55%, well below the industry norm of 1.5%. The incentive fees are also being pared back. However, the team would be entitled to higher compensation if prescribed performance hurdles are achieved.
The fund's investments will be wound down slowly to avoid fire sales in the depressed market.""
Source
http://www.realert.com/headlines.php?hid=52897
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