Wall Street Journal: Lehman, SunCal Settle Bankruptcy Dispute, October 25, 2011


After a long court battle, the estate of bankrupt investment bank Lehman Brothers Holdings Inc. has won control of a valuable land portfolio from the SunCal Cos., California's largest land developer.

The two companies, which have been warring over the land for three years, filed papers Sunday in a Santa Ana, Calif., bankruptcy court, outlining a compromise.

Under the terms of the plan, which still needs court approvals, Lehman will assume control of most of the projects, including Marblehead Residential, a 247-acre, unbuilt piece of land perched on a bluff above the ocean in San Clemente, Calif., which is considered the crown jewel of the portfolio.

In return SunCal will get $3 million cash and an option to buy two of the projects. Three other projects in the portfolio are still in play. SunCal chief executive Bruce Elieff also will be released from more than $230 million in personal guarantees he signed on bonds related to the deals.