New York Giants Punt $300 Million Lehman Claim

The New York Giants football squad has punted its chance to have a $301.8 million claim against Lehman Brothers Holdings Inc. paid out on par with other similarly situated creditors of the failed investment bank.

A stadium financing unit tied to the National Football League team sold its rights to the claim, even though the Giants and Lehman continued to spar this week over the investigation into the validity of the alleged debt.

The financing entity, Giants Stadium LLC, sold the claim to Bank of America for an undisclosed sum in July, court records show. Then, in a bankruptcy flea-flicker, Bank of America sold the claim a day later to a Boston entity called Goal Line Partners LLC.

Left unanswered in court papers is who is behind the new owner of the Giants’ claim.

James F. Mooney signed off on the claim transfer as Goal Line Partners’ general manager, but no affiliation with an investment firm was mentioned. The attorney who filed the paperwork, Anne Pak of Ropes & Gray LLP, did not respond to a phone message. Her firm bio, however, says she has represented a private equity investor in Lehman’s case.

By selling the claim, the Giants unit realized an immediate payment rather than waiting at least several more months to see if the alleged debt is ultimately allowed and for what amount, said Andrew Gottesman, head of the bankruptcy claims unit at SecondMarket Inc.

The need for liquidity, cost of pursuing the claim and risk that the claim won’t be allowed are all factors that lead creditors to sell their claims in bankruptcy cases, he said.

But the price the Giants entity received for its claim would have been a “discount against what the buyer perceived as the ultimate recovery value,” Gottesman said.

Giants Stadium LLC was set up by the team’s owners, the Mara and Tisch families, to fund the construction of the team’s new home field, now called MetLife Stadium. The financing entity believes it’s owed the money from derivatives contracts it entered into back in 2007 with a Lehman Brothers unit. The interest-rate swap was terminated after Lehman collapsed in September 2008.

A month later, Giants Stadium LLC made the nine-figure claim against Lehman in bankruptcy court. John Mara, the Giants president and co-owner, signed off on the original claim.

The Giants’ claim is among the many that Lehman is still investigating as it seeks to clarify its total amount of debt as creditors begin voting this month on its liquidation plan.

Lehman is requesting that Giants Stadium LLC turn over additional documents, including correspondence between the unit, its attorneys and financial adviser Goldman Sachs.

The Giants unit cited attorney-client privilege as a reason for not producing the documents, but Lehman, in court papers, said such privilege only protects communications between a lawyer and a client, and Goldman’s presence makes the documents fair game.

Separately, Giants Stadium LLC has asked the court to allow it to participate in the deposition of Robert Taylor, a former Lehman employee who negotiated the stadium financing pact. Lehman has said the financing unit’s attorneys could attend the deposition but could not ask questions.