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SunCal, D.E. Shaw Making Promises Without Authority

It’s simply amazing that the City of Alameda continues to move forward with SunCal for Alameda Point, as more and more evidence of their questionable dealings come forward with regards to their bankrupt California projects. Deceptive push-poll telephone surveys are nothing!

According to Implode-Explode o’meter contributors, drawing on court filings, SunCal and D.E. Shaw have been mis-representing themselves to city officials in Oakland, San Clemente, Los Angeles and Torrance, California, with regards to having authority over the independent SunCal-Lehman entities attached to projects in those cities, such as Oak Knoll (Oakland) and Marblehead (San Clemente.)

According to documents from the bankruptcy case, Lehman’s advisors are spanking SunCal firmly:

We remind you that under the terms of the [LLC] Operating Agreement, the SunCal [“SC”] member has no authority to conduct the bankruptcy case or make any decisions relating to the bankruptcy case on behalf of the property owner. This would include, without limitation, the retention of counsel for the property owner, the filing of any motions in the bankruptcy case on behalf of the property owner, and the granting of consent or otherwise stipulating to any relief sought by third parties on the bankruptcy case on behalf of the property owner…You are hereby notified that until further notice, the SC [SunCal] Member has no such authority from the LB [Lehman Brothers] Manager.

This gives insight into how events might play out if SunCal’s Alameda Point project goes belly-up – SunCal trying to assert authority over the project where they have none, and D.E. Shaw, their capital partner reminding them of their place. The operating agreement between SunCal and D.E. Shaw clearly gives control to D.E. Shaw. Clearly SunCal is acting in desperation over these projects in Oakland and Southern California – they would be no less desperate should Alameda Point fall apart.

We’re going to work to try to pull some of these documents directly from the U.S. bankruptcy court’s pay-for-access PACER system over the next few days.

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