Lehman gets court OK to exercise right to buy Archstone interests

By Caroline Salls

Pittsburgh, Jan. 11 - Lehman Brothers Holdings Inc. received court approval to exercise its right of first offer to acquire 50% of all interests held by affiliates of Bank of America Corp. and Barclays Bank plc in various entities affiliated with Archstone Enterprises LP, according to an 8-K filed Wednesday with the Securities and Exchange Commission by Equity Residential.

In addition, Equity Residential said in the 8-K that the U.S. Bankruptcy Court for the Southern District of New York denied Lehman's motion for an injunction to prevent ERP Operating LP's acquisition of the interests in question.

As previously reported, Equity Residential subsidiary ERP entered into a $1.33 billion interest purchase agreement with the Bank of America and Barclays affiliates on Dec. 2.

One of the conditions to the ERP acquisition of the interests is Lehman not exercising its right of first offer.

Equity Residential said Lehman's ability to acquire the interests remains subject to its delivery of a binding notice exercising the right by Jan. 23.

If Lehman does not deliver the binding notice by Jan. 23 or close its acquisition of its interests by Jan. 25, the purchase agreement will remain in force and ERP will continue to work to complete the acquisition, according to the 8-K.

If Lehman does close on the acquisition, ERP will then be entitled to exercise its rights under another interest agreement.

Under that separate agreement between ERP and the sellers, ERP will be entitled to exercise the right to acquire all other interests held by the Bank of America and Barclays affiliates for total consideration of at least $1.33 billion in cash if it does not acquire the 50% interest because of Lehman's exercise of its right of first offer.

That ERP right will expire 30 days after Lehman closes on its acquisition of the interests.

New York-based Lehman Brothers Holdings 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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