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Lehman 3/25
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Developer Seeks $22M From Lehman Over Meadowlands Loan
Mar 25, 2016 | Law360
By Stewart Bishop
The former developer of what is now the American Dream retail and entertainment complex in New Jersey’s Meadowlands on Thursday told a New York judge a Lehman Brothers-affiliated lender owes it over $22.8 million in damages, saying Lehman’s conduct led to its loss of its stake in the project. -
Video: What Erin Callan Did After Lehman Collapse
Mar 24, 2016 | Bloomberg Businessweek
Bloomberg's Sheelah Kolhatkar reports on Former Lehman Brothers Senior Executive Erin Callan's memoir, "Full Circle: A Memoir of Leaning In Too Far and the Journey Back." -
Erin Callan, former CFO of Lehman Brothers, shares 3 of the most important lessons she's learned during her career
Mar 25, 2016 | Business Insider
By Natasa Lekic
...Before Montella became CFO, she led a successful division of Lehman and became the cochair of WILL (Women's Initiatives Leading Lehman). At first, the attention WILL required seemed like overkill, and she didn't take the group seriously:
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Meadowlands Loan
Erin Callan Memoir
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Developer Seeks $22M From Lehman Over Meadowlands Loan
Mar 25, 2016 | Law360
By Stewart Bishop
The former developer of what is now the American Dream retail and entertainment complex in New Jersey’s Meadowlands on Thursday told a New York judge a Lehman Brothers-affiliated lender owes it over $22.8 million in damages, saying Lehman’s conduct led to its loss of its stake in the project.
A real estate investment entity known as ERC 16W LP claims it was forced to foreclose on the project, then known as the Meadowlands Xanadu, after Lehman went belly up in 2008 and a Lehman Brothers Real Estate Mezzanine Partners LP-affiliated vehicle, Xanadu Mezz Holdings LLC, then missed contractually obligated loan payments.
During oral arguments in Manhattan over dueling summary judgment bids before New York Supreme Court Judge Marcy S. Friedman, ERC attorney Sheron Korpus of Kasowitz Benson Torres & Friedman LLP said there’s no triable issue of fact that XMH failed to fund advances due under the loan agreement between the parties, that it breached the loan agreement, that ERC lived up to its obligations under the deal, and that ERC was damaged by XMH’s breach.
“What’s really changed in discovery to get over the words of the agreement? Nothing,” Korpus said.
Lehman has argued ERC can’t support a breach of contract claim since it failed to live up to its own part of the deal, saying ERC hid tens of millions of dollars in cost overruns from lenders in the syndicate that was backing the project and failed in its contractual obligation to keep the loan in balance. Korpus said none of this was raised at the time, and argued that ERC lived up to its duties for the project.
“This is all ex-post facto, after discovery, trying to reverse engineer a reason for their default,” Korpus said.
Lehman attorney Jacob S. Pultman of Allen & Overy LLP told Judge Friedman that ERC was not a party to XMH’s separate guarantee with lenders that it would fully fund its lending obligations, and as such cannot claim breach of contract stemming from an agreement to which it was not a party.
“There is not a piece of deposition testimony that says we intended to confer this benefit on ERC,” Pultman said.
He said the parties involved in this project are some of the most sophisticated investors out there, and if they intended to designate ERC as a third-party beneficiary, they would have said it explicitly.
“The case law on third-party beneficiaries says it must be apparent from the face of the contract,” Pultman told Judge Friedman. “Your honor has a similar case in which it says you may not recover as a third-party beneficiary unless it clearly appears on the provisions of the contract that the parties intended to confer a direct benefit.”
Pultman further argued that ERC failed to live up to its obligations under the loan agreement and hid massive cost overruns from the syndicate’s agent bank.
“Internally, they used one number; externally, they used a different number,” Pultman said. “They didn’t give lenders accurate information because they wanted the lenders to continue lending.”
ERC had sought $1.3 billion, arguing that XMH and Lehman were responsible for the loss of the massive amount of equity it sunk into the project. Judge Friedman last year rebuffed that claim, saying the contract doesn’t place “such a heavy responsibility on XMH, one of several lenders, as to render it potentially liable for damages for loss of 100 percent of ERC's capital investment, whether or not the project was completed.”
That ruling was later affirmed by a mid-level appeals court, which called ERC’s bid for consequential damages representing its entire equity stake to be “out of proportion to any liability contemplated by the contract.”...For full story: http://www.law360.com/articles/775926/developer-seeks-22m-from-lehman-over-meadowlands-loan
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Video: What Erin Callan Did After Lehman Collapse
Mar 24, 2016 | Bloomberg Businessweek
Bloomberg's Sheelah Kolhatkar reports on Former Lehman Brothers Senior Executive Erin Callan's memoir, "Full Circle: A Memoir of Leaning In Too Far and the Journey Back." Kolhatkar speaks on "Bloomberg ‹GO›."
For full video: http://www.bloomberg.com/news/videos/2016-03-24/what-erin-callan-did-after-lehman-collapse
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Mar 25, 2016 | Business Insider
By Natasa Lekic
A few months ago, Erin Callan Montella, who had once been the most powerful woman on Wall Street, gave me a call.
She was looking to self-publish a memoir that showed what she had lost from "leaning in" too far: "Full Circle: A Memoir of Leaning In Too Far and the Journey Back."
What struck me, as I read her book, was that despite the decades she spent working obsessively and reaching ever greater heights, she now believes she didn't need to put in as much time as she did:
"When it comes to the way I did things and how extreme I was about the time commitment to work, I can see now how it could have been different. Modestly different I think with a similar amount of success. A huge commitment was necessary, but not nearly as big as what I made it."
Three events suggested she could have done things differently and achieved the same level of success. Here are the lessons learned:Don't let work creep into your free time
We often believe small decisions, such as writing work emails in our free time, are inconsequential. Just one quick reply. Maybe two, to reduce Monday's workload. These choices can turn into habits that eat into more and more of our free time.
"One story comes to mind so clearly when I think about how I overdid it. I could never stop thinking about work. As I remember it was the summer of 2004 and I had taken the week of July 4th off.
"This particular week I was up at 5 in the morning because I couldn't sleep. I was at my weekend house in East Hampton. I crept downstairs quietly, made a beeline for my computer and opened my emails. Within seconds I was typing away. One quick answer back I got from a colleague in Asia asked me if I was in the London office. Now why was that I wondered? Well, maybe, just maybe because I was writing emails at 5 in the morning EST! About non-urgent topics.
"It would have been noon in London. That would have made a lot more sense. But no. That was just me. Writing emails at 5 in the morning on my so-called vacation. That didn't have to happen. There are thousands of those examples. It didn't have to be that way."Make time for important (non-work) endeavors
Before Montella became CFO, she led a successful division of Lehman and became the cochair of WILL (Women's Initiatives Leading Lehman). At first, the attention WILL required seemed like overkill, and she didn't take the group seriously:
"My effort was completely half-assed, the same way I treated life outside of my job."
When the prior head of WILL called her out on her behavior and asked her to either step up or step down, Montella chose to commit to the program.
Over two years, she spent an average of one hour every workday on WILL. The biggest takeaway was that her job didn't suffer. In fact, it flourished. "This evidence points to the answer that I feel in my heart of hearts today. If I'd done things a little differently, changed the paradigm between work and home, it could have worked. Maybe it's anecdotal evidence, but it's a reason to hope."
YoutubeCallan on CNBC during her time at Lehman.
Do things at work that make an impact
One event stands out in Montella's memory as a turning point in her career. Before she became CFO, she was asked to give a speech at the Women's Bond Club of New York. All she had prepared was an outline; the speech itself was extemporaneous. She gave an honest and emotional description of her career.
Many young women approached her afterward to express how much her speech had resonated with them. It reached the point where a few members of the Executive Committee (the folks who ran Lehman) heard about it and congratulated her.
"I think that was an unexpectedly defining moment in my career. In their eyes, I went from being just a top producer in investment banking, to someone with charisma and public-speaking skills. A motivator. A leader perhaps … The feeling of exhilaration I had from making an impact with seemingly so little effort was powerful."
Rock CenterCallan with her husband, Anthony Montella, on Rock Center.
The other side of success
Less than a year later, Montella was asked to become the CFO of Lehman. She often wonders what would have happened if she hadn't accepted the role. Anthony, her second husband, says, "When you live a big life there are big consequences, both good and bad."
She was officially CFO for just seven months. Before Lehman collapsed, Montella resigned in an effort to assuage public perception.
The aftermath wasn't easy for a woman who had placed her career above everything else.
"By the age of 42, I had made my career the absolute center of my existence, consuming all my energy and focus." Her job was her identity. When a therapist said, "Erin, you know what you do is not who you are," it didn't make sense.
"The way I looked at the world, what I did was the totality of who I was. And if I wasn't doing it, then was I anybody really? Was there any value to me without my job? Was there any identity? Any sense of purpose?"
Everything culminated on the night before Christmas Eve in 2008.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
Meadowlands Loan
Erin Callan Memoir
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