The chief executive of Irvine-based master developer is battling former financier Lehman Brothers Holdings Inc. in bankruptcy court over guarantees that made him personally responsible for as much as $230 million related to stalled real estate projects, according to a Wall Street Journal report.
Bruce Elieff’s personal pledge is something of a throwback for real estate developers, the Journal notes. Back in the 1980s and ’90s, developers routinely backed projects themselves.
But for the past 15 years or so, they’ve structured deals to insulate themselves from being personally liable when things go bad.
That makes the battle between Elieff and Lehman unique. Bankruptcy lawyers for Lehman are looking to hold Elieff to bond guarantees he made.
Elieff’s lawyers argue Lehman should be held responsible for paying the bond obligations, citing an agreement last year to indemnify him in event of a default.
*For more on this story, read the full Wall Street Journal article.
