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Lehman Apr 13

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

    Saint Louis University

  1. The Ghost of Lehman Brothers Haunts American Higher Education

    Apr 11, 2015 | Salon

    By Alan Smith and Aditya Pande

    The ghost of Lehman Brothers is still haunting colleges and universities around the country, continuing to extract money from institutions even though the financial firm itself is long dead. When Lehman Brothers Holdings declared bankruptcy in 2008, it was the fourth largest investment bank in the United States. The giant’s collapse was felt in all...

    2. Malibu Associates

  2. Guy Who Tanked Lehman Now Tanking a Malibu Golf Course

    Apr 10, 2015 | Curbed Los Angeles

    By Adrian Glick Kudler

    In 2008, Dick Fuld was responsible for the largest bankruptcy filing in American history as the long-time, last-ever CEO of Lehman Brothers. The investment bank's collapse—the result mostly of hoarding shitty securities backed by subprime mortgage loans—triggered a global recession that disfigured a lot of lives. That guy should probably never...

    3. Full Text of Stories Below

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

    Saint Louis University

  1. The Ghost of Lehman Brothers Haunts American Higher Education

    Apr 11, 2015 | Salon

    By Alan Smith and Aditya Pande

    The ghost of Lehman Brothers is still haunting colleges and universities around the country, continuing to extract money from institutions even though the financial firm itself is long dead.

    When Lehman Brothers Holdings declared bankruptcy in 2008, it was the fourth largest investment bank in the United States. The giant’s collapse was felt in all corners of the global economy, but at least that collapse was thought to be a thing of the past. Now, it turns out that Lehman Brothers lingers on as a bankruptcy group trying to collect debts from the schools it already fleeced in 2008.

    In St. Louis, the haunting is public: Lehman is suing St. Louis University because it doesn’t feel the school paid a fair market value (equivalent to the termination fee at a given time) on some interest rate swap derivatives in 2008.

    Let’s look at that transaction: the school paid about $25 million in early termination fees on its interest rate swaps.* SLU didn’t necessarily want to bail out of these swaps, even though they were costing the school millions; it had to terminate them because Lehman Brothers, the counterparty to the deals, was going belly up. But in a lawsuit filed in December 2014, Lehman alleges that SLU’s termination payments were short of market value and that Lehman is in fact owed another $17.5 million on these swaps.

    Let’s say that again: These swaps triggered in 2008 because of the Lehman bankruptcy. The school had to pay a termination fee because the firm that owned the swaps had effectively ceased to exist. And now that firm is suing the school because it wasn’t adequately compensated for its own failure...

    For full story:

    http://www.salon.com/2015/04/11/the_ghost_of_lehman_brothers_haunts_american_higher_education_partner/

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    2. Malibu Associates

  2. Guy Who Tanked Lehman Now Tanking a Malibu Golf Course

    Apr 10, 2015 | Curbed Los Angeles

    By Adrian Glick Kudler

    In 2008, Dick Fuld was responsible for the largest bankruptcy filing in American history as the long-time, last-ever CEO of Lehman Brothers. The investment bank's collapse—the result mostly of hoarding shitty securities backed by subprime mortgage loans—triggered a global recession that disfigured a lot of lives. That guy should probably never have control of anything ever again, not even a stake in a golf course. Well, Fuld is in fact a partner in the Malibu Golf Club, a non-membership course that is open to anyone willing to pay $100 a round. The golf club recently filed for its second bankruptcy and is now closed.

    Fuld and his partners (various developers and venture capitalists) formed Malibu Associates in 2005, bought the 650-acre club in 2006 for $32.8 million, and then "took out millions more in loans to help with their grand plans to restore the course and add resort-style amenities," according to the LA Business Journal. They hoped to overhaul the 1976 club (which is in the unincorporated Santa Monica Mountains, not Malibu proper) into "a retreat suitable for corporate conclaves … [with] 40 bungalows, meeting facilities and a new clubhouse complete with a fitness center and restaurant."

    Cal National Bank lent the group $40 million to help buy the club and fund the entitlement process for the makeover, and after Lehman collapsed in 2008, they asked Fuld to submit updated financial statements. According to a court filing by Malibu Associates, "Although these statements showed a decline in his net worth, they demonstrated that his net worth and liquidity still vastly exceeded the total amount of the indebtedness." It's mostly irrelevant to the story, but let's just pause here for a second and breathe that in.

    Ok, so even though Fuld still had gajillions after tanking the global economy, Cal National got nervous, froze the credit line, and doubled the interest rate on the loan. Then they tried to foreclose on the golf club and that's when it went into its first bankruptcy, in 2009.

    Meanwhile, that very same economic collapse tanked Cal National, and in 2009 regulators closed the bank and transferred its assets to US Bank. In 2011, Malibu Associates made a deal with US Bank that consolidated the loans and pushed back the due date, as long as the owners got their development approvals by October 2014. They've only just gotten the approvals, months past the deadline, and so US Bank has been trying to foreclose on its property...

    For full story:

    http://la.curbed.com/archives/2015/04/dick_fuld_lehman_brothers_malibu_golf_club.php

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