<div><p>NEW YORK (Reuters) - Rap music artist, Jay-Z, on Wednesday sued an investment firm and a bank, accusing them of trying to "bleed" $3.7 million from him over a loan to help him build a hotel on Manhattan's west side.</p><p>The lawsuit was filed in a Manhattan federal court against Highland Capital Management LP and NexBank SSB, concerning a property located at 511 West 21st Street in Manhattan, which was to be developed into lodging known as the J Hotel.</p><p>Highland said in a statement it would defend itself against Jay-Z's "meritless" claims, adding the loan remains in default. A lawyer for Dallas-based NexBank did not return a request for comment. Robert Chan, a lawyer representing Jay-Z, declined to comment.</p><p>Jay-Z's given name is Shawn Carter, who is the named plaintiff in the lawsuit. The 40-year-old is one of the world's best-known rap artists and entrepreneurs.</p><p>According to the complaint, Jay-Z's company bought the property in August 2007, and obtained a $52-million senior loan that was assigned to Highland and serviced by NexBank, and which the rapper guaranteed. The company also obtained an $11.8 million junior loan.</p><p>But a declining real estate market caused the property's value to fall, prompting Jay-Z's company to try to give the land back to Highland instead of going into foreclosure.</p><p>The complaint said Highland dragged its heels, causing Jay-Z to rack up interest and carrying costs for which he was personally liable.</p><p>It also contended that Highland improperly diverted funds that Jay-Z's company had placed into a reserve to cover potential environmental problems.</p><p>"This action arises out of the efforts by defendants to bleed additional funds from plaintiff," the complaint said. "Defendants embarked on a bad faith course of conduct."</p><p>The complaint seeks $3.7 million of damages, a declaration that would allow the property to be returned, and other remedies.</p><p>The case is Carter v. Highland Capital Management LP et al, U.S. District Court, Southern District of New York, No. 10-00854. (Reporting by Jonathan Stempel; Editing by Gary Hill)</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=68417225&bid=informcom" /></div><div id="copyright"><div>

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