However, at about the same time, Lehman also filed suit against the banks, asking the entire timetable, and a $66 million deposit fee, be put on hold through a court-ordered injunction.

In asking for the injunction, Lehman had said in its court filings that there have been certain material breaches of the Archstone agreements.” The company says in its court motion that the banks “failed to include all material terms of the transfers.” Lehman said in the motion, and in its SEC filing, that it has not been provided documents and information agreed to be provided by both parties if a sale was to be made. In the motion, Lehman also asked the judge to force the banks to produce these documents. In the motion and in the Lehman SEC filing, the company claims that it does not believe Equity’s offer values Archstone correctly.

Equity and the banks, in the court answers and in Equity’s SEC filings, maintain that Lehman has been given more information than is required by contract. “At base, plaintiffs simply don’t like the fact that defendants have chosen to sell 50% of their interests in the Archstone Entities to a competitor,” the banks said in their court-filed answer.

Kevin Lindemann, director of the real estate group for SNL Financial, tells GlobeSt.com that Zell is getting a good deal if he can get the contract price for an Archstone share. Archstone has moved assets around since it was taken private in 2007, and has built up the highest quality multifamily portfolio in the market, Lindemann says.

“Equity’s interest is very understandable,” he says. “This deal fits in with Equity’s idea of getting more exposure to coastal, high barrier markets, and it would certainly be an upgrade of its existing portfolio. The pricing is very attractive for Equity, estimating a cap rate of about 5.3% on the deal, it’s a bargain.”

He expressed skepticism that Equity will be able to gain entry to Archstone, however, because of Lehman’s fight. “It really comes down to what’s the best valuation of the deal,” Lindemann says. “Can you get the best deal for shareholders by selling off assets one by one, or by selling off the portfolio as one massive chunk of properties, as Lehman is expected to do?”

Archstone has 48,922 apartment units, including 14,000 in Germany. Equity owns or has investments in 417 properties in 15 states and Washington, DC. The company has said it would fund the purchase through cash, debt, sales and its $1.2 billion revolving credit facility.