Lehman dec 24

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ACTS Retirement-Life Communities

1. Lehman Sues Retirement Home Operator Over Swap Deal

   Dec 23, 2015 | Law360

   By Jonathan Randles
   
   
   Lehman Brothers on Wednesday sued ACTS Retirement-Life Communities in New York bankruptcy court over a soured interest rate swap transaction, accusing the senior living facility operator of cheating Lehman out of a substantial termination payment and fees.

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Client Attorney Privileged/Attorney Work Product/At Request of Counsel

ACTS Retirement-Life Communities

1. Lehman Sues Retirement Home Operator Over Swap Deal

   Dec 23, 2015 | Law360

   By Jonathan Randles

   Lehman Brothers on Wednesday sued ACTS Retirement-Life Communities in New York bankruptcy court over a soured interest rate swap transaction, accusing the senior living facility operator of cheating Lehman out of a substantial termination payment and fees.
   
   The lawsuit accuses ACTS, the largest not-for-profit operator of retirement homes in the U.S., of waiting to end the agreement several months after Lehman filed for bankruptcy in September 2008 in order to realize a multimillion-dollar gain on the swap deal. ACTS sought to “ride out the market” in order to realize a profit on the deal it would otherwise have not been entitled to, Lehman claims.
   
   Lehman says ACTS was required under the agreement to terminate the deal and calculate the value of its potential gain  when the investment bank filed for bankruptcy because it triggered an event of default under the agreement. But had ACTS done so, the company would have owed a termination payment because Lehman was “in the money” at that time, according to the complaint.
   
   The lawsuit said ACTS, which was being advised by KSR Capital Advisors Inc., claimed a Lehman unit involved in the deal owed the retirement home operator more than $50,000. The time ACTS decided to end the deal, July 2009, allowed the company to realize a multimillion-dollar gain it wouldn't have otherwise, the lawsuit said.
   
   The lawsuit was filed by Lehman Brothers Holdings Inc. and Lehman Brothers Special Financing Inc. In the complaint, ACTS is also accused of failing to make monthly $200,000 payments that were required under the deal for 10 months from October 2008 to July 2009.
   
   ACTS operats 23 life care retirement communities in Pennsylvania, Delaware, Maryland, North Carolina, South Carolina, Georgia, Alabama and Florida, according to its website. The company could not immediately be reached for comment.
   
   The complaint is one of several lawsuits Lehman has filed over the last several months over interest rate swap deals it made with various companies. Many of the defendants in these lawsuits were advised by KSR Capital Advisors, Lehman said in the latest complaint. KSR Capital Advisors is not a defendant in the lawsuit...

   For full story: http://www.law360.com/articles/741569/lehman-sues-retirement-home-operator-over-swap-deal
   

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