The loan agreement was “unambiguous,” according to the new ruling – and attorneys for Colony said the company will proceed to sue Xanadu Mezz for as much as the full $600 million it had invested in Xanadu. In addition, attorney Sheron Korpus said in a statement, the company will attempt to recover $25 million it had advanced to cover monthly loans it was supposed to receive from Xanadu Mezz in early 2009. If the former Lehman Brothers subsidiary does not have the money to cover whatever amount in damages may eventually be recovered, Korpus said, the ruling means that Lehman Brothers Real Estate Mezzanine Partners is liable.

The 2.9 million-square-foot project is now officially supposed to open next year as American Dream Meadowlands, but in actuality it remains in limbo. The current developer Triple Five, which operates Mall of America in Minnesota, still has not secured state and federal environmental permits through the New Jersey Sports & Exposition Authority, which is the landlord for the Meadowlands property.

The permits are necessary before the state will move forward with authorization of a $1.7 billion public funding package that Gov. Christopher J. Christie announced with fanfare a year ago.