Lehman Brothers Europe Sues Dubai Real-Estate Group Over Swap Transactions
Dubai Holding Commercial Operations Group LLC, a real estate and hospitality group owned by the emirate’s ruler, was sued by Lehman Brothers International Europe over the value of swap transactions.
LBIE, which is in administration in the U.K., filed the lawsuit in London, according to court papers. The case is “a straightforward financial dispute regarding the valuation of certain swap transactions entered into between the parties,” LBIE’s administrators, PricewaterhouseCoopers LLP, said yesterday in an e-mailed statement.
The value of the deal is $24 million, Dubai Holding Commercial said in a statement today. The company said it “disputes LBIE’s claim” over the “close-out value of certain swap transactions that have been terminated” and “intends to vigorously defend the case.”
Dubai Holding Commercial reported a full-year loss of 22.8 billion dirhams ($6.2 billion) on June 1, compared with a year- earlier profit of 10 billion dirhams after property prices there fell. The company last month got a two-month extension on its $555 million credit line that was about to mature. Its parent, Dubai Holding LLC, and its units owe banks $12 billion and began talks to roll over some of the loans, a person with knowledge of the matter who declined to be identified said in May.
LBIE’s parent, New York-based Lehman Brothers Holdings Inc., had more than 900,000 derivative contracts outstanding when it filed bankruptcy in 2008 listing $613 billion in debt.
The case is Lehman Brothers International Europe (in administration) v. Dubai Holding Commercial Operations Group LLC, case no. HC10C02586, High Court of Justice, Chancery Division (London).
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