Lawsuits will follow Lehman’s bankruptcy

October 20, 2008 12:41PM

With Lehman Brothers locked in bankruptcy, many real estate
firms don’t have financing to complete construction, meet lease
obligations or pay vendors to complete sales, raising the prospect of a wave of
lawsuits and defaults. As first reported in The Real Deal, a contractor filed suit against the Lehman-financed Swig Equities’ development at 25 Broad Street. Lawyers representing 2,400 real estate projects across
the country are expected to start filing suits over the coming days in a bid to
access the projects’ developers’ financing. Lehman’s Chapter 11 filing provides it protection from
any attempts to collect funds.

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