Is Jay-Z Having Financial Problems?
According to BusinessWeek he is. Sean Carter also known as Jay-Z has filed a lawsuit for 3.7 million dollars. He is suing the investment firm Highland Capital Management LP in a dispute over loan guarantees. More below.
Carter, in his complaint filed yesterday in federal court in New York, claims Highland and co-defendant NexBank SSB are attempting to “bleed” from him funds in excess of those he and two other men pledged to pay when they guaranteed the non- principal obligations of a company planning to build a hotel in Manhattan’s west side neighborhood of Chelsea.
Highland Capital, based in Dallas, was founded by James Dondero and Mark Okada in 1993. It oversees about $25 billion in assets, chiefly in credit markets. NexBank is based in the same city.
Highland and NexBank acted in bad faith when they declined to clear Carter and his fellow guarantors of their obligations after receiving a deed in lieu of foreclosure on the property, according to the complaint.
The rap star is seeking a declaratory judgment that he has met those obligations. He’s also seeking damages of more than $3.7 million for the additional interest and other costs incurred while still being held liable under the agreements.
Sean Carter is not completely in the clear as it is also being reported that Jay-Z has defaulted on a 52 million dollar loan. “In August 2007, a company controlled by Mr. Carter borrowed $52 million as a loan to purchase Manhattan property for a future boutique hotel,” Nina Devlin, a Highland spokeswoman, said in an e-mailed statement yesterday.
The loan, held by funds managed by Highland, matured in August and is in default, Devlin said.
“Highland Capital Management believes the claims asserted by Mr. Carter are merit less and will vigorously defend itself and intends to pursue the obligations owed to Highland’s investors,” she said.
Susie Lomelino, a NexBank spokeswoman, said she couldn’t immediately comment yesterday.
The case is Shawn C. Carter v. Highland Capital Management LP, 10-00854, U.S. District Court, Southern District of New York (Manhattan).
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