Jay-Z Sues Investment Firm and Bank Over Failed Hotel Deal

Jay-Z. Photo:interviewmagazine

via cnbc

Jay-Z sued an investment firm and bank(Highland Capital Management LP and NexBank SSB), accusing them of trying to get him to pay them $3.7 million, based on a loan he used to build a hotel in New York City's Chelsea section, on West 21st Street.

The gist of it is, Jay-Z wanted to build a hotel in Manhattan by the name of J Hotel.

He bought the property for the hotel in August of 2007. The same year he took out a $52 million loan(it's not clear whether he used it to buy the property).

He also obtained an $11.8 million loan.

In short, the real estate market tanked, the hotel never got built and Jay-Z got stuck with the property. In the course of avoiding foreclosure, he became liable for interest and costs(that's where the $3.7m comes from).

He's blaming the lender(Highland Capital Management LP) for moving slowly and putting him in the unfavorable position of owing on the loans.

He's also alleging they improperly diverted funds.

Read for yourself...