Jay-Z (né Shawn Carter) is suing a large Dallas-based investment firm, Highland Capital Management.
Lawyers for the rapper and businessman say Jay-Z filed the $3.7 million lawsuit in New York courts over a loan a company he controlled took in 2007.
He borrowed $52 million as a non-principal investor with intentions to build a boutique hotel in the Chelsea neighborhood in Manhattan. It would have been called the J Hotel.
But according to Jay-Z, when the real estate market began to slip, he tried releasing his obligation in the partnership, according to terms set up in the initial agreement. The loan company delayed the process, Jay-Z’s lawyers say, costing the rapper and businessman millions in interest.
Nina Devlin, a Highland spokeswoman, told BusinessWeek in an e-mail yesterday that Jay-Z’s claim is “meritless” and her employer plans to vigorously defend itself. “The loan, held by funds managed by Highland, matured in August and is in default," Devlin wrote.
Jay-Z’s lawyers are also accusing the company of diverting funds from a reserve account he set up in case he ran into any environmental problems.
According to BusinessWeek, Highland manages about $25 billion in assets, mostly in credit markets.