Resort Project Abandoned by Lehman Comes Back to Life

More than 1,300 miles from New York, on the uninhabited island of West Caicos, a group of European investors is helping to pick up the pieces from the collapse of Lehman Brothers. The new developers bought Lehman’s stake in an unfinished luxury development called Molasses Reef in December, about four years after the bank’s failure set off a global financial crisis—and stranded more than 400 Chinese construction workers at the site with semibuilt condos and weed-clogged swimming pools.

Lehman, once the world’s fourth-largest investment bank, put up the majority of the money for Molasses Reef as part of its expansion into real estate before filing the biggest bankruptcy in U.S. history in September 2008. In the wake of its exit from court protection last year, Lehman is liquidating properties, including condos in Hawaii and office towers in Detroit. Lehman has paid more than $32 billion to creditors so far. It said in December that it raised $3.9 billion in the quarter ended Sept. 30 and another $1.6 billion in October and November, while its $6.5 billion sale of apartment owner Archstone is due to close by March 26.