Lehman Brothers Holdings has sued an owner of the renamed MetLife Stadium in East Rutherford, N.J., for canceling interest-rate swap contracts, allegedly to wriggle out of paying millions of dollars to the financial firm.
Lehman and Giants Stadium LLC, which has a 50 percent ownership interest in MetLife Stadium, have attempted to reach a settlement over the value of the swap contracts since the bank slid into bankruptcy in September 2008, officially sparking the credit crisis. But negotiations went sour as Lehman accused the LLC of crafting a “contorted plan” to sidestep the financial obligations, according to the lawsuit. The swap contracts, underwritten by Lehman, were used to hedge $650 million in bonds used to finance the stadium construction.
After terminating the swap contracts, Giants Stadium alleged that Lehman owed it around $301 million, a figure the bank disputes. Lehman said the swaps were at about $60 million just before the company filed for Chapter 11 protection.
Lehman, which came out of bankruptcy last year with a plan to reimburse creditors roughly $65 billion, is now seeking damages of at least $94 million plus interest. [Reuters] — Julie Strickland