Wall Street Journal: Judge Sides With Barclays in Lehman Discount Suit, February 22, 2011


In court papers filed Friday in U.S. Bankruptcy Court in Santa Ana, Cailf., SunCal Management LLC, whose development arm helped to conceive the projects with Lehman's backing, said the trustee's plan tries to "gerrymander" Lehman's claims in a bid to unfairly force a "cramdown" on the properties' junior lenders.

One of those junior-lien lenders, a unit of Gramercy Capital Corp., is also balking at the trustee's plan, which it says "ignores the fundamental rights and interests of some of the largest creditor constituencies in these cases, primarily for the benefit of the trustee[,] the estate professionals and an insider of the debtor."

At issue are several stalled real-estate projects covering more than 5,000 acres in Southern California. The properties include McAllister Ranch, a 2,070-acre planned residential community near Bakersfield; and McSweeny Farms and SummerWind Ranch, a pair of developments in Riverside County. They've been mired in bankruptcy for more than two years.