Wall Street Journal: Market Watch: Lehman, SunCal to face off in bankruptcy court, October 21, 2011
On Monday, Lehman Brothers Holdings Inc. LEHMQ -3.23% and California land developer SunCal Cos. will face off in Orange County, with rival plans to bring about 20 stalled real-estate projects out of bankruptcy.
The failed investment bank and SunCal--once allies during the boom years of the California real-estate bubble but now bitter adversaries--have been sparring for more than three years in bankruptcy courts on both coasts over the fate of the projects.
The two sides have rival proposals to bring the projects out of bankruptcy, with Lehman taking control of the projects under its plan. SunCal's plan is based in part on its equitable subordination lawsuit against Lehman. If successful, that suit would bump Lehman's hundreds of millions of dollars in secured claims below the claims of lower-ranking creditors.