Lehman Brothers Holdings Inc. (LEH)

.A group of investors in Lehman Brothers Holdings Inc. (LEHMQ) minibonds appealed a judge’s decision to let the defunct firm settle derivatives transactions in a way that affected their pursuit of getting more money for the bonds.

U.S. Bankruptcy Judge James Peck this month approved Lehman’s request to make the change, defeating an objection from Asian investors who bought Lehman structured notes known as minibonds. Ka Kin Wong and nine other investors said today in a filing that they appealed in U.S. District Court in Manhattan on behalf of a trust administered by HSBC Holdings Plc and themselves, “as well as all others similarly situated.”

About 43,000 Hong Kong investors bought an estimated $1.8 billion of the minibonds from various sellers before New York- based Lehman filed for bankruptcy in 2008. Investors protested almost daily outside bank branches in Hong Kong, banging cymbals and blaring pre-recorded statements from bullhorns after they were offered repayments of at least 60 cents on the dollar in 2009.

PricewaterhouseCoopers LLP, the receiver handling the minibond transactions, said on March 27 that the repayment offer was boosted so some minibond holders may receive 70 percent to 93 percent of their money back. Some investors want all their money refunded.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).  

April 28 (Bloomberg) -- A group of Lehman Brothers Holdings Inc. creditors who favor substantive consolidation revised their proposed Chapter 11 plan and disclosure statement yesterday. The hearing for approval of the disclosure statement is set for June 28.

The revised plan, by a group including Paulson & Co., modifies the estimates of recoveries by each creditor class. The disclosure statement says the changes resulted from Lehman’s new asset valuation estimates. The new plan also revises the treatment of some creditor classes given Lehman’s view about the interpretation of subordination agreements.

The revised plan now contains what the Paulson group calls payment notes to record transfers of claims against Lehman. The disclosure statement says that issuing payment notes will increase liquidity in the market for the trading of Lehman claims, thus enhancing their value.

The new disclosure statement says that holders of $83.6 billion in senior unsecured claims can expect a recovery of about 25.4 percent. For general unsecured creditors with $12.3 billion in claims, the recovery is now pegged at 22.6 percent. For holders of $35.7 billion in unsecured subsidiary claims, the recovery is now seen as 21.1 percent.

In each case, the recovery is about 1 percentage point higher than the Paulson group estimated in December.

Lehman filed papers yesterday intended to facilitate the resolution of disputes over $55 billion sought in 21,000 claims based on $40 billion in structured securities either issued or guaranteed by Lehman. The securities have values based on indexes such as those for currencies or interest rates.

Lehman is proposing to give notices to claimants in late June specifying its opinion about the correct amount of the claim. If there is no objection within 45 days, the amount of the claim will be fixed for the purposes of voting and distribution on Lehman’s plan.

If a creditor objects and the dispute isn’t resolved, the claim will go into the previously approved mediation process.

Lehman says that the resolution of derivatives claims will only be for the purpose of its currently pending plan. If Lehman decides to abandon the compromise contained in the plan, it reserves the right to object to the derivatives claims. Lehman is also evidently saying that the reductions it realizes in derivatives claims won’t benefit proponents of the two competing plans.

In other developments, Lehman and New York state taxing authorities settled corporate franchise tax claims.

Lehman was being audited with regard to corporate franchise taxes for the years 1992 through 2007. New York filed $1.2 billion in claims against the Lehman parent and subsidiaries, contending that each Lehman company was liable for the taxes as part of a so-called control group.

In papers filed in bankruptcy court April 26, Lehman said the New York franchise tax dispute involves novel issues and would entail complex litigation if not settled. Consequently, Lehman and the New York tax authorities agreed to a settlement where Lehman will pay more than $144 million to end the dispute.

Lehman said it will allocate the payment among the subsidiaries “taking into account historic tax-sharing principles.”

There will be a hearing in bankruptcy court on May 18 to approve the settlement.

At the May 18 hearing, Lehman will be the target of a so- called lift stay motion filed by the Evangelical Christian Credit Union.

The credit union explains how it has a $6.6 million matured loan secured by a parcel of 22 acres in Riverside, California, owned by the Life Church of God in Christ.

The credit union says the property was appraised for $2.38 million. Consequently, the credit union says Lehman’s subordinate mortgage has no value.

The credit union wants the bankruptcy court to modify the so-called automatic stay so it can foreclose both the church’s ownership interest and Lehman’s subordinate mortgage.

A managing director in Lehman’s fixed income division is taking an appeal from a bankruptcy court ruling in February that Barclays Plc was not obligated to pay him more than $19 million in bonuses when he signed on to work for Lehman in April 2008. He was fired after working one month for Barclays after the acquisition. For Bloomberg coverage, click here.

Three Chapter 11 plans are now vying to reorganize Lehman. The plans cover the spectrum on the issue known as substantive consolidation. The group including Paulson has a plan with substantive consolidation. The newest plan, filed this week by a group including affiliates of Deutsche Bank AG and Goldman Sachs Group Inc., has no substantive consolidation whatsoever. Lehman’s own plan falls somewhere in the middle, in an attempt at compromise with creditors seeking substantive consolidation.

In substantive consolidation, the assets derived from all Lehman companies are thrown into one pot and creditors of all companies are treated alike. Guarantees aren’t honored, and inter-company debt is disregarded. In substantive consolidation, some creditor groups come out better and some worse.

There will be a hearing in bankruptcy court on June 28 to consider approving disclosure statements explaining the plans. Lehman is aiming for a confirmation hearing in November to approve one of the plans.

The Lehman holding company filed under Chapter 11 in New York on Sept. 15, 2008, and sold office buildings and the North American investment banking business to Barclays Plc one week later. The remnants of the Lehman brokerage operations went into liquidation on Sept. 19, 2008, in the same court, with a trustee appointed under the Securities Investor Protection Act.

The Lehman holding company Chapter 11 case is In re Lehman Brothers Holdings Inc., 08-13555, while the liquidation proceeding under the Securities Investor Protection Act for the brokerage operation is Securities Investors Protection Corp. v. Lehman Brothers Inc., 08-01420, both in U.S. Bankruptcy Court, Southern District of New York (Manhattan).  

.Barclays Plc (BARC), which bought bankrupt Lehman Brothers Holdings Inc.’s North American business in September 2008, is seeking $2.3 billion in assets used to back futures’ trades, disputing a claim by the trustee liquidating the remnants of Lehman’s brokerage.

U.S. Bankruptcy Judge James Peck in Manhattan granted Barclays at least $800 million of “clearance box” assets, which are certain assets held to clear trades, at a trial last year. Barclays, which claimed it was owed a total of $3 billion from its purchase of the Lehman business, filed its demand in U.S. bankruptcy court yesterday.

In addition to the so-called margin assets, London-based Barclays said Peck should award $769 million in assets if the brokerage trustee doesn’t need them to satisfy “legitimate” customer claims.

Barclays made the filing after Peck directed Barclays, Lehman and the brokerage trustee to submit arguments interpreting his ruling.

The case is In re Lehman Brothers Holdings Inc. (LEHMQ), 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).  

4:11 a.m. MDT, April 29, 2011

AVON, Colo. (AP) — The Vail Daily reports that public records show the Ritz-Carlton Bachelor Gulch in Avon is in foreclosure.

The newspaper says Eagle County records show the luxury hotel's owner owes Lehman Brothers $61 million, which could make it the largest foreclosure in the county's history. Miami-based Gencom, the owner, has 27 hotels and properties across the country.

County records show the foreclosure sale date for the hotel is Aug. 24. Ritz-Carlton officials say hotel operations won't be disrupted.  

April 29 (Bloomberg) -- Lehman Brothers Holdings Inc. reported yesterday that total cash increased about $617 million in March to end the month at $23.2 billion.

Unrestricted cash at the month’s end was $19.2 billion. Cash receipts during the month were $1.14 billion.

Lehman Brothers Special Financing Inc. remained in the lead among the Lehman companies with $8.95 billion cash. Lehman Commercial Paper Inc. was in second place with $4.7 billion, followed by the holding company with $2.6 billion. All amounts include restricted cash.

Professional fees and expenses since the case began now total $1.24 billion, including $31.9 million in professional costs, plus fees for the U.S. Trustee system, in March.

The fees for Alvarez & Marsal LLC, Lehman’s financial adviser, now total $422.9 million, including $10.2 million in March. The fees for Weil Gotshal & Manges LLP, Lehman’s principal bankruptcy lawyers, now total $286 million, including $6.1 million in March.

Attorneys for the official creditors’ committee from Milbank Tweed Hadley & McCloy LLP have been paid $89.89 million since the case began.

For details on the expenses in March, click here for other Bloomberg coverage.

Three Chapter 11 plans are now competing to reorganize Lehman. At one extreme is the plan proposed by a group including Paulson & Co. that calls for total substantive consolidation.

The plan filed this week by a group including affiliates of Deutsche Bank AG and Goldman Sachs Group Inc. has no substantive consolidation at all. Lehman’s own plan is somewhere in the middle, offering a compromise in favor of creditors favoring substantive consolidation.

There is to be a June 28 hearing to consider approval of disclosure statements explaining the plans. November is the target date for a confirmation hearing for approval of one plan. In substantive consolidation, all assets from all Lehman companies are thrown into one pot, and unsecured creditors receive the same distribution regardless of the company from which the claim arose.

The Lehman holding company filed under Chapter 11 in New York on Sept. 15, 2008, and sold office buildings and the North American investment-banking business to Barclays Plc one week later. The remnants of Lehman’s brokerage operations went into liquidation on Sept. 19, 2008, in the same court, with a trustee appointed under the Securities Investor Protection Act.

The Lehman holding company Chapter 11 case is In re Lehman Brothers Holdings Inc., 08-13555, while the liquidation proceeding under the Securities Investor Protection Act for the brokerage operation is Securities Investor Protection Corp. v. Lehman Brothers Inc., 08-01420, both in U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Updates

Barclays, Lehman Trustee Brief Continuing Disputes

Barclays Plc and the trustee liquidating the defunct broker Lehman Brothers Inc. submitted a combined 85 pages of briefs yesterday in their dispute over the interpretation of how much each side won or lost as a result of the Feb. 22 opinion by the bankruptcy judge.

The opinion resulted from a 34-day trial that began in April 2010 and continued over ensuing months. The trustee, appointed under the Securities Investor Protection Act, contends that Barclays is attempting to “undo much of the court’s opinion” by claiming $1.5 billion to $3.5 billion of so-called margin assets that the court awarded to the trustee.

The trustee contends that Barclays created a $6 billion offset to unravel the award of the margin assets.

For its part, Barclays argues it is entitled to “actual delivery” of assets in the so-called clearance box. The trustee contends that Barclays is attempting improperly to recover appreciation in the assets since the sale in 2008.

Among other things, Barclays is laying claim to $2.3 billion in margin assets and $769 million in so-called 15c3-3 assets.

There will be a hearing on May 9 with regard to the issue of deciding exactly how much each party owes the other as a result of the February opinion. For other Bloomberg coverage, click here.

The trial represented an unsuccessful effort by the Lehman parent to recover $11 billion from Barclays. For a summary of the Feb. 22 opinion and the disputes over its interpretation, click here for the April 13 Bloomberg bankruptcy report.  

April 29, 2011, 10:36 am The F.D.I.C.’s Lehman Fantasy
By STEPHEN J. LUBBEN
I was in Paris at an international insolvency conference when the Federal Deposit Insurance Corporation came out with a paper on how it would have resolved Lehman Brothers under the new resolution authority in the Dodd-Frank Act.

The response was uniform disbelief: “Ninety-seven percent to the unsecureds? Give me a break.”

And I was equally skeptical, for a return to unsecured creditors that high would be rare even in a nonfinancial Chapter 11 case. And for a failed investment bank, with large holdings of subprime mortgage backed securities, going into an insolvency process during a financial crisis, it seemed to strain credulity.

So upon my return, I spent some time carefully reading, and rereading, the F.D.I.C.’s 19-page document.

Some of the report suggests the F.D.I.C. would have achieved exactly what was achieved in the Chapter 11 case – a quick sale to Barclays – and some of the report seems to rest on pure fantasy. The last bit helps a lot if you want to pay creditors back in full.

And some of the report does highlight real differences between Chapter 11 and the Dodd-Frank resolution authority. But the report does not explain why those differences need persist or consider whether they are really as desirable as the report implies.

Of course, the F.D.I.C. might have no real interest in saying that we could achieve the same result under some modified version of the Bankruptcy Code. The “specialness” of financial institutions is better preserved by pretending the code will be as it always has been.

For example, the F.D.I.C. never really explains why derivatives are treated differently under Dodd-Frank than under Chapter 11. Indeed, the agency seems to justify the special treatment of derivatives in all cases where it causes problems for somebody other than the F.D.I.C.

Similarly, the report makes much of the high professional fees in Lehman, which come out of the bankruptcy estate, compared with an F.D.I.C.-run resolution process, where there presumably would be no such charges. But that facile comparison ignores the simple truth that Chapter 11 cases are self-funding, while the government subsidizes the F.D.I.C. Just because the agency would not charge the estate does not make the process free. Moreover, the true cost is the net cost after considering returns to creditors. If the F.D.I.C. returns substantially less to creditors, it may not really matter that they cost less.

But let’s address the ways in which the report simply restates what happened already in the Chapter 11 case. Many bankruptcy professionals who take the time to read the full report are apt to come away more than a bit annoyed.

The F.D.I.C. would have you believe that it is somehow a unique feature of the new resolution authority that losses are imposed on shareholders and assets are quickly transferred to a new buyer, with new money financing facilitating the whole thing. That sounds a lot like what happens in every big Chapter 11 case.

Indeed, the bits of the report that talk about how the Dodd-Frank resolution authority helps to facilitate the sale of a distressed firm’s “good” assets while allowing for the liquidation of the “bad” assets leaves one wondering if the F.D.I.C. has heard of the General Motors bankruptcy case. Or the Lehman bankruptcy case.

One major difference in the report is that the F.D.I.C. assumes that Barclays would have taken much of more of Lehman than it did. Here we are starting to get into the realm of wishful thinking.

For example, the report assumes that Barclays would have taken Lehman’s entire derivatives business. This is not based on any special provision of Dodd-Frank, but rather the idea that if counterparties knew they had a new, solvent counterparty (Barclays), they would not have any incentive to exercise their right to terminate.

If Barclays had said on Day One of the Chapter 11 cases that it was going to take Lehman’s derivatives business, you could have achieved the same result. But Barclays did not do this, and one has to wonder if it simply did not want Lehman’s derivative business. The F.D.I.C. never really explains how it might get Barclays to buy more of Lehman than it did.

Indeed, much of the F.D.I.C.’s analysis ultimately turns on the belief that “next time will be different.” Particularly, both the regulators and the management of Lehman would plan for Lehman’s insolvency in a way that did not happen in 2008.

Why this would be so is often a bit vague, based on little more than conclusory sentences like:

Lehman’s senior management and board may have been more willing to recommend offers that were below the then-current market price if they knew with certainty that there would be no extraordinary government assistance made available to the company and that Lehman would be put into receivership.

Basically, they’d know that federal regulators are not fooling around this time, because Dodd-Frank says so. But if management was deluded before, shouldn’t we assume they would be deluded again? And if the board failed to live up to its duties by planning for even the possibility of a Chapter 11 filing, why assume it would not make a similar failure in the F.D.I.C.’s alternative reality?

Yes, Dodd-Frank makes it harder to bail out a financial institution. But “harder” does not mean “impossible,” and that’s just the kind of thing that can fuel a lot of terminal optimism by managers of companies in financial distress.

And all this presumed regulatory involvement could have happened in 2008, too. It would not have been the F.D.I.C, but the Securities and Exchange Commission, as regulator of Lehman’s broker-dealer operation, or the Federal Reserve or the Treasury Department, as general overseers of the financial system, could have made some inquiries into Lehman’s planning for the worst-case scenario at some point before Sept. 14, 2008. Indeed, as the F.D.I.C. report notes, the New York Fed and the S.E.C. had been on site at Lehman from March 2008.

And let’s not forget that even if the F.D.I.C. had authority over Lehman at that time, it just might have been a bit distracted by Washington Mutual, Wachovia, Citigroup and the other troubled banks that were its normal focus.

More generally, given all that we’ve been through in the last few years, it seems more than a little odd that regulatory competence should be taken for granted.

And then there is the matter of the 97 percent return to unsecured creditors. How does F.D.I.C. come up with that figure? Well, first we must assume that the only Lehman assets that lose any value in the fall of 2008 are the $50 billion to $70 billion of “suspect” assets.

Everything else remains stable during and despite the resolution, and the suspect assets decline by $40 billion. These suspect assets are ones that several other financial institutions refused to touch – not simply refused to buy at par value, but rather refused to buy at all.

Then Barclays pays 100 percent for Lehman’s assets, apparently despite there being no competing bidder.

So, you see, if you assume very stable asset values during a financial crisis and a buyer that is quite generous, it is quite easy to get to a very high recovery for creditors. Unfortunately, Weil and Alvarez have to deal with a somewhat different reality.

Once a financial firm has become in need of resolution, there has already been a failure of regulation. Why the same regulators should be in charge of cleaning up the mess is something that continues to puzzle me. Certainly they deserve a say, and the special nature of financial institutions will often call for special solutions, but count me among those who remain unconvinced by the very “in house” solution adopted by Dodd-Frank.  

NEW YORK -(MarketWatch)- Barclays PLC (BCS, BARC.LN) and the trustee overseeing the liquidation of Lehman Brothers Holdings  U.S. brokerage are offering a judge very different interpretations of his decision to award the trustee billions of dollars in the Lehman "secret discount" lawsuit, setting the stage for another battle over assets that Barclays purchased when it bought the broker-dealer business in 2008.

In court filings late Thursday, Barclays and the Lehman trustee, James W. Giddens, each submitted to Judge James Peck of U.S. Bankruptcy Court in Manhattan proposed orders based on his February ruling that the trustee is entitled to certain assets either claimed by Barclays or being held in third-party accounts. The trustee interpreted Peck's order to mean that it is entitled to, most notably, about $4 billion in a margin account.

In the more widely followed portion of that ruling, Peck rejected most of the Lehman parent company's claims of Barclays reaping a secret windfall when it bought Lehman's broker-dealer unit in September 2008.

Barclays said in its proposed order that of the $4 billion in the margin account, about $1.5 billion is in noncash and noncash equivalents, and should therefore go to Barclays. In the frantic days of September 2008 when Barclays bought Lehman's broker-dealer business, Peck was told that cash and cash equivalents wouldn't go to Barclays from Lehman. The trustee said that the entire $4 billion is cash and cash equivalents. The trustee also says interest should be paid on the margin account, to which Barclays disagrees.

The two sides are also disputing $869 million in "clearance box" assets that Peck said belongs to Barclays. The trustee said in his filing that he will pay the $869 million to Barclays, but Barclays said the value of those assets has increased greatly in value since 2008, and should therefore be worth more.

"The Trustee's proposed order is consistent with the Court's straightforward and well-reasoned ruling two months ago," said Hughes, Hubbard & Reed LLP's William R. Maguire, a lawyer for the trustee. "Our proposed order avoids delay and protracted litigation and is fair to LBI's public customers. Barclays appears to want to undo Court rulings and 'do-over' its past arguments."

Barclays declined to comment.

Some of the money is already in Barclays's hands and presumably must be returned to Lehman. The rest of it is either held by Lehman's estate already or is in accounts held by third parties or in a segregated account.

A May 9 hearing has been scheduled for Peck to consider the two orders.

Giddens is winding down Lehman's brokerage business under the authority of the Securities Investor Protection Corp., which governs the liquidation of failed brokerage firms.

The trustee's team has transferred 110,000 brokerage accounts with a value of more than $92 billion out of Lehman Brothers following the investment bank's collapse more than two years ago.

Lehman last year sued Barclays for billions, accusing the British bank of negotiating a discount not adequately disclosed to the court when it bought Lehman's broker-dealer unit in 2008. Barclays argued in the months-long trial that both sides negotiated in good faith, and the deal, approved by Peck just days after the investment bank collapsed into bankruptcy, was Lehman's best option.

Lehman pressed its case that in the tumultuous days of September 2008, when Barclays was finalizing its purchase of Lehman's brokerage, Barclays scrambled for more assets and negotiated with some Lehman executives a $5 billion discount. Lehman said its bankruptcy attorney, Weil, Gotshal & Manges partner Harvey Miller, and other Lehman representatives weren't informed of the discount and neither was Peck. Lehman sought to recover what it called more than $11 billion in ill-gotten gains by Barclays.

In his ruling, Peck wrote at several points about the so-called "clarification letter" that became a focal point of the case, a letter Peck agreed at the time of the sale should be drafted to address several complications and list some assets moving over from Lehman to Barclays. On several occasions throughout Lehman's bankruptcy and the Barclays trial, Peck emphasized he never approved the actual letter.

But in his ruling, Peck agreed with a key Barclays argument about the letter, saying, "While not expressly approved in so many words, the Clarification Letter is deemed approved" by the fact that it was known that it would be drafted, and that no party objected to it in court.

While Lehman fought to prove the discount, Lehman's trustee disputed the transfer of assets in the margin account and other accounts.  

Sandler - Apr 29, 2011 6:28 PM
Business ExchangeBuzz up!DiggPrint Email .Barclays Plc (BARC) must pay $1.8 billion plus interest at 9 percent to the trustee liquidating Lehman Brothers Holdings Inc. (LEHMQ)’s brokerage, trustee James Giddens said in a court filing. The U.K. bank said it is owed that amount.  

stürzen wir heute wieder so ab ???  

0.0520  

so ein neuer account namens jerri zu???

nunja, zumindest ist ersichtlich, dass der nächste schlüsseltermin lehman vs barcleys der 9. mai is.

Grüße  

May 2 (Bloomberg) -- Lehman Brothers Holdings Inc. is claiming $500 million from Barclays Plc for allegedly failing to pay all of the bonuses the U.K. bank agreed to when it bought the defunct investment firm’s North American business.

Lehman wrote a letter to U.S. Bankruptcy Judge James Peck saying an opinion he wrote in February showed that Barclays “breached its bonus payment obligations.” The letter was filed in U.S. Bankruptcy Court in Manhattan on April 29.

Barclays has said it paid the full $2 billion it promised, including non-bonus compensation. Peck issued the February opinion in a lawsuit that Lehman lost seeking $11 billion from Barclays over the deal.

Peck’s ruling, which followed a trial with more than 30 days of testimony, exonerated Barclays from having contrived to make a “windfall” on the purchase as Lehman alleged. The ruling left the two sides still fighting over what is owed to whom.

Separately, the trustee for Lehman’s brokerage is in a dispute with Barclays over $3.5 billion in assets after Peck failed to specify how much Barclays was entitled to when it bought the North American business in September 2008.

Michael O’Looney, a spokesman for London-based Barclays, didn’t immediately respond to an e-mail seeking comment.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).  

Origins of LAMCO

LAMCO was originally formed to serve as the asset management platform for Lehman Brothers Holdings Inc. (“LBHI”). Following its bankruptcy filing, LBHI sold its North American capital markets business to Barclays Capital and sold its European and Asian capital markets business to Nomura Holdings, but retained the majority of its assets. Given the prevailing market conditions, it was determined that a liquidation of these assets would greatly diminish recovery value. As a result, LBHI devoted considerable resources to develop a leading asset management capability focused on maximizing value over time for less liquid legacy assets.

Today, LAMCO is a global platform with offices in New York, London and Hong Kong providing clients with the benefits of a large-scale platform combined with deep, local market knowledge.  

Certain company financing transactions may have occured amongst the company entities. For presentation purposes, inventory collaterizing the financing transactions has not been transfered and continues to be reflected on the balance sheet of the entity receiving the financing along with the related liability.  

May 3, 2011 8:33 PM

.Cerberus Capital Management LP and Chatham Lodging Trust won a bankruptcy auction for 65 hotels owned by Innkeepers USA Trust with a bid of about $1.1 billion, according to two people familiar with the matter.

Cerberus and Chatham won the auction after a Lehman Brothers Holdings Inc. (LEHMQ) affiliate and Five Mile Capital Partners had agreed to lead off the bidding with a $970.7 million offer, said one of the people.

The offer from Lehman and Connecticut-based asset manager Five Mile separated seven hotels from the sale. The auction of the seven remaining hotels is ongoing, said one of the people.  

ohne links bringts nix  

About Us | FAQ | Work For Us 05/04/2011
Auction Set for Near-Vacant Building in NY


A foreclosure auction is planned for a nearly vacant office building in Midtown Manhattan whose condominium-conversion plan fell victim to the market crash.

Lehman Brothers holds more than $325 million of defaulted debt on the 321,000-square-foot property, at 1107 Broadway. It has scheduled a foreclosure auction for June 6, according to marketing materials provided to investors.

Lehman has hired Eastdil Secured to drum up interest in the auction. The hiring of a broker is a routine step in Uniform Commercial Code foreclosures, because the courts want to ensure that lenders widely advertise foreclosure proceedings. Meanwhile, Lehman is negotiating with the borrower about a possible settlement that would avert the auction.

Lehman is clearly positioned to take over the property. It could effectively “bid” up to the amount of debt it holds without putting up any cash. But it’s unclear whether Lehman prefers to foreclose or would step aside if a third party bid a high enough price for the debt.

The Flatiron District property, known as International Toy Center North, is owned by a partnership that includes Tessler Developments of New York. Tessler, which is led by Yitzchak Tessler, bought a 50% stake in 2007. The seller, a partnership between investor Joseph Chetrit and Arbor Realty of Uniondale, N.Y., retained the remaining 50% interest. The transaction valued the property at $235 million. Tessler, continuing the path of Chetrit and Arbor, planned to convert the building into residential condos.

The property is at the northwest corner of West 24th Street, at the point where the sloping Broadway intersects with Fifth Avenue alongside Madison Square Park. It is connected by an air bridge to the 800,000-sf office building at 200 Fifth Avenue, which is on the southwest corner of West 24th Street.

In 2005, a Chetrit partnership bought 1107 Broadway, 200 Fifth Avenue, the 8,300-sf building at Seven West 24th Street and another small building for a combined $355 million. In 2007, Chetrit sold 200 Fifth, known as the International Toy Center, to L&L Holdings of New York for $485 million.

Lehman’s debt package financed the recapitalization of 1107 Broadway and the attached Seven West 24th Street. The package had an original balance of $343 million, including mezzanine debt. The Tessler partnership drew down $203 million immediately, with the balance earmarked for the renovation. Some of that balance was subsequently drawn down. Including accrued interest, the Tessler partnership now owes more than $1,000/sf, or $330 million.

Lehman, which is in bankruptcy, has yet to file any documents with the U.S. Bankruptcy Court outlining its long-term plan for 1107 Broadway. The investment bank, which had a massive commercial real estate portfolio when it collapsed, has held on to some properties that it felt would rebound in value relatively soon and has looked to sell or recapitalize others.

The 16-floor building at 1107 Broadway is a candidate for redevelopment. It is zoned for both commercial and residential use and, unlike 200 Fifth Avenue, doesn’t have a Landmark designation. The building has been largely vacant since 2007 and is currently only 9% leased. The lone tenant is a Citibank branch on part of the ground floor and basement. The building at Seven West 24th Street is subject to a ground lease that expires in 2027.

Both 1107 Broadway and 200 Fifth Avenue were long known as the headquarters for toy manufacturers. The buildings hosted annual trade shows for the industry, giving rise to the International Toy Center moniker.  

May 5, 2011 3:23 PM GMT+0200

Barclays Plc (BARC), which bought Lehman Brothers Holdings Inc.’s North American business, must return $2.1 billion in margin assets to the trustee liquidating the remnants of the brokerage, the trustee said.

Trustee James Giddens raised his demand for margin assets from $1.8 billion on April 28, as he and Barclays step up their dispute over about $3.5 billion in assets after a judge’s ruling failed to specify how much Barclays was entitled to take in September 2008. He wants interest at 9 percent on the $2.1 billion.

At the same time, Giddens agreed to pay Barclays $869 million in damages plus 9 percent interest for failing to deliver trading assets after the purchase. The so-called clearance box assets were held to clear trades.

London-based Barclays is claiming $1.5 billion of the disputed margin assets, saying it was entitled to take non-cash margin in the deal. In a court filing yesterday, it said the judge “should clarify” his February order, spelling out the bank’s right to margin and other assets.

Barclays said it was entitled to $134.8 million owed to futures exchanges, plus other sums for liabilities it took on with the purchase.

Barclays Claims
“Barclays is making claims that would derail and undermine the progress to date and result in unjustifiable delays in the recovery of assets for LBI’s public customers,” said William Maguire, the trustee’s lawyer, in an e-mail today.

LBI is Lehman Brothers Inc., the remnants of the brokerage.

Michael O’Looney, a Barclays spokesman, didn’t immediately respond to an e-mail seeking comment.

The filings by Barclays and the Lehman brokerage come ahead of a court conference scheduled for next week by U.S. Bankruptcy Judge James Peck. The judge had directed Barclays and Giddens to interpret the ruling he made in February granting the London- based bank some assets and denying it some others, including cash.

Three-Way Fight
The ruling followed a trial last year that involved a three-way fight, with lawyer David Boies representing the U.K.’s third-biggest bank. Barclays said it was owed $3 billion on the brokerage deal, and the trustee demanded about $7 billion from Barclays. The Lehman parent sought an alleged $11 billion “windfall” it said Barclays made on the purchase.

Peck denied Lehman’s claim and reduced the trustee’s right to assets.

Lehman wrote a letter to the judge on April 29, saying it was claiming $500 million from Barclays for allegedly failing to pay all of the bonuses the U.K. bank agreed to when it bought the defunct investment firm’s business. Barclays has said it paid all the promised bonuses and other compensation.

The case is In re Lehman Brothers Holdings Inc. (LEHMQ), 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).  

Hallo, Jerri:

Mein Name ist Teras - und ich mögte Dich hiermit ganz herzlich BITTEN, zu Deinen teils recht interessanten Text-Ausschnitten auch die jeweilige QUELLE mit anzugeben, was am einfachsten durch das Anfügen des einschlägigen LINK's geht...

Alles Andere, nicht nur so genannte VOLL-Citate (also das Einstellen des gesammten Fremd-Textes), sondern vor Allem das QUELLEN-lose "Citieren" (das ja gerade WEGEN der fehlenden Quelle eigentlich KEIN Citieren ist), wird sonst sehr leicht als ein SPAM wahrgenommen.

Nichts für ungut:
Der olle Teras.

WAILUKU, Hawaii — The winning bidder of a luxury Maui hotel in a foreclosure auction has no plans to lay off employees.

The Maui News reported Friday the Ritz-Carlton Kapalua's major creditor Lehman Brothers outbid two others at $75 million.

A Lehman attorney says it will be business as usual and that the workers are needed to staff the sprawling resort and spa.

An official from the union representing most of the hotel staff says he is confident workers will be retained.

International Longshore & Warehouse Union representative Stephen West says the union recently made concessions, including no pay hikes.

West says in today's economy, workers feel fortunate to have jobs.

Creditors foreclosed on the 404-unit property after loans taken out to finance a lavish renovation in 2008 couldn't be repaid.  

Did you really GET, what I tried to tell you in #7344?
http://www.ariva.de/Hallo,_Jerri_t344623?page=293#jumppos7344

Hi Teras, nur wegen deinem GLAUBEN

http://www.greenfieldreporter.com/view/story/...I--Ritz-Carlton-Maui/  

LG: Teras.

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