Bankruptcies can be a bittersweet breakup for even the best and most respected business partnerships. SunCal Cos. and Lehman Bros. Holdings Inc. are currently in a heated bankruptcy dispute over many assets including a development for 313 luxury homes overlooking the Pacific Ocean south of Los Angeles.
Both sides have presented valid points to bankruptcy judge Eric A. Smith, who faces a tough decision before October 15. SunCal is questioning the validity and legality of several of Lehman's transactions as sales rather than negating the trading of bank debt.
These infractions would put SunCal in a better position to claim the enormous settlement off the sale of the lucrative asset. SunCal has argued that Lehman failed to disclose that it no longer owned the loans and that it was acting as an agent to Fenway Capital, the current owners.
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