Lehman Brothers won’t oppose planned Town Square mall foreclosure

By Steve Green

Wednesday, Feb. 16, 2011 | 4:11 p.m.

Bankrupt investment bank Lehman Brothers Holdings Inc. won't be standing in the way of the planned foreclosure of the big Town Square mall and office complex in Las Vegas.

Lenders led by Bank of Nova Scotia, New York Agency, and owed $449 million petitioned Lehman's New York bankruptcy court last month to allow them to proceed with the foreclosure with the argument Lehman has no claims to the collateral backing the $449 million loan.

Approval of the Lehman bankruptcy court was needed because Lehman has separately asserted a $72 million claim against Town Square's developers, brother and sister Jeff and Jacquelyn Soffer of the Florida-based Turnberry Associates development company.

Bank of Nova Scotia's request was set for a hearing Wednesday, but court records show that was called off because Lehman Brothers didn't object to the bank's foreclosure motion. The parties have reached a stipulation and plan to file it with the court later.

A Turnberry spokesman said the New York bankruptcy court action means Bank of Nova Scotia can now show the title company handling the planned foreclosure sale that the Town Square title isn't clouded by Lehman's claim against the Soffers.

Town Square and Turnberry on Wednesday said talks about a voluntary restructuring that have been under way since last summer are continuing, that Turnberry hopes to maintain partial ownership of the development and that these refinancing talks are not affecting daily operations at the mall.

"Turnberry continues to manage the property, and we are optimistic that we will emerge from these negotiations with those management rights and an equity interest in the mall," Turnberry reiterated in a statement Wednesday.

Town Square at Interstates 15 and 215 has some 900,000 square feet of retail, restaurant and entertainment space and another 300,000 square feet of office space.