Goldman Sachs Owes Back Rent on Property it Sublet to AIG

Thursday, August 27, 2009 , , 1 Comments

I'm not entirely sure WTF is going on here
but I am fairly sure it's tangentially appropriate.

Developer sues Goldman Sachs for back rent (Crain's NY):

On Wednesday, Mr. Monian sued Goldman—which had backed some of his deals in the past—for at least $75 million, alleging that the investment bank broke the terms of its lease of his building at 180 Maiden Lane. Mr. Moinian’s action followed a lawsuit that Goldman Sachs filed against him last month alleging that he owed it at least $3.1 million.

Goldman leased the building from Mr. Moinian in 1998 for 15 years. The bank alleges Mr. Moinain owes it $3 million because it didn’t exercise a termination option in the lease last year. Sources said the bank sought to use the building as a sort of safety valve so it can stagger its move into the new headquarters it is constructing downtown, which is slated to begin in the fourth quarter.

Instead, Goldman subleased the building to insurer AIG but retained the right to keep employees in the building. According to Mr. Moinian’s lawsuit, AIG is paying the rent for Goldman on the space the investment bank has already left at 180 Maiden Lane. The suit claims the arrangement means that Goldman is profiting from the sublease and that the lease terms require it to share 50% of any profit with Mr. Moinian. He alleges that Goldman has spared itself $150 million in rents because of the arrangement with AIG.

“Goldman pushed Moinian too far—thinking he would not push back,” said Stephen Meister, who is representing Mr. Moinian. “Goldman’s cozy deal with AIG will not withstand judicial scrutiny.”

AIG declined to comment. Mr. Meister speculated that the troubled insurer would only agree to pay Goldman’s rent because the lease carries two five-year renewal options at below market rates. AIG agreed to sell its headquarters and another building downtown earlier this year.

A Goldman spokeswoman said Mr. Moinian’s suit had no merit.

Well, sure, Goldman spokeswoman, you may be right but to be entirely honest, Goldman itself has no merit so I'm not sure you are entirely qualified to discuss things of which you are not familiar.

Now I haven't been able to determine this yet but I'm wondering if perhaps there is some hilarious irony to be found in Goldman Sachs subletting AIG a property at Maiden Lane that I'm missing because I'm too outraged by the audacity of our friends from GS?

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


OldSouth said...

Well, you've got to give GS credit for shamelessness. I've found that the crooks I encountered all share a certain brazenness, playing upon the stunned incredulity of the victim whilst making their getaway.

Works almost every time!