Lehman gets OK to buy note to protect $437 million property investment

By Lisa Kerner

Charlotte, N.C., June 16 - Lehman Brothers Holdings Inc.'s request for court approval to make an up to $255.4 million new debt investment in a New York high-rise building to protect its previous investment in the property was granted, according to an attorney close to the case.

As previously reported, the company wants to purchase a $255.4 million B note from estate funds.

According to Lehman's motion, the company originated $1.23 billion in loans to finance the purchase of the property at 237 Park Avenue in May 2007 by affiliates of Broadway Partners.

In August 2009, Lehman said it believed that the Broadway Partners affiliates were going to default on the B note and, as a result, it began discussions regarding a potential restructuring of the note.

Lehman said making a new investment in the property has significant upside for the company and is the best way to protect its roughly $437 million investment in 237 Park.

New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008. Its Chapter 11 case number is 08-13555.

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