Lehman Sues Developer for $368 Million Over Towers
Lehman Brothers Holdings Inc., the bankrupt U.S. securities firm, filed two lawsuits seeking more than $368 million from New York developer Kent Swig, claiming he failed to make loan payments on two former Wall Street office towers, Bloomberg reported.
Swig didn't make payments on mortgage and construction loans for 25 and 45 Broad St. in lower Manhattan and hasn't paid contractors working there, Lehman said in complaints filed yesterday in New York State Supreme Court in Manhattan.
Real estate developers are converting office skyscrapers into apartments in Manhattan's financial district just as the credit crisis and recession is cutting demand. Fourth-quarter apartment sales dropped 9.4 percent from a year earlier, according to a Jan. 6 report from Miller Samuel Inc. and Prudential Douglas Elliman.
Attorneys for Swig filed a motion of discovery today in U.S. Bankruptcy Court in New York, claiming that Lehman "continually set arbitrary and unrealistic deadlines and changed the structure and terms of the transaction."
Swig was given a $231.7 million mortgage for 25 Broad St., and additional construction loans of $19.7 million and $26.7 million in March 2007 to convert the building to apartments, according to the complaint.
At 45 Broad St., Lehman lent Swig $37.7 million in June 2006 and $11.5 million in February 2007. Lehman said it's seeking to foreclose on the buildings and wants to sell them.
Lehman spokeswoman Kimberly Macleod declined to comment.