Orange County Business Journal: Projects With SunCal Drive Part of Lehman's Big Loss


In April, I did a front-page story detailing a series of financial restructuring deals made by Irvine developer SunCal Cos. and one of its largest financiers, New York-based Lehman Brothers Holdings Inc.

Now the dealings between the two are starting to get a lot more attention from Wall Street, following a massive quarterly loss for Lehman.

Two months ago, I reported that SunCal had reworked its financing for close to 30 projects-many of them backed by Lehman-including San Clemente's Marblehead Coastal housing development.

SunCal has told San Clemente city officials that it now is aiming to get early work done at Marblehead by December, about 18 months behind schedule.

Terms of the restructurings with Lehman weren't disclosed at the time. SunCal officials said the deals allowed them to remain in control of the projects, most of them in Southern California.

There was talk at the time that Lehman might look to bring in another developer. In one case, a default notice was filed for a SunCal property in Bakersfield.

A few more details were disclosed earlier this month, following Lehman's announcement that it lost $2.8 billion in the second quarter-a disclosure that brought about a huge hit to the stock of the fourth largest U.S. investment bank.