TOKYO, July 15 (Reuters) - Global buyout firm Lone Star Funds is looking for buyers for a complex of buildings in central Tokyo after exclusive talks with Singapore's sovereign wealth fund GIC Pte Ltd stalled due to a legal dispute over the property's ownership, according to three people with direct knowledge of the matter.
GIC earlier this year agreed to buy Meguro Gajoen, an office complex and a wedding hall, for about $1.3 billion which, if finalised, would be one of the largest property deals in Tokyo since the 2008 financial crisis.
GIC, however, is now cautious about completing the sale due to a lawsuit filed in April by the family of Meguro Gajoen's founder, Rikizo Hosokawa, said the sources, who declined to be named because the matter remains confidential.
Both GIC and Lone Star declined to comment.
Lone Star gained control of most of the Meguro Gajoen in 2002 by buying debt owed by the founding Hosokawa family from a group of lenders at a discount and made several attempts to sell the property since 2006.
Two of Hosokawa's granddaughters retained ownership of part of the property, which they sold in 2007 to the Japanese unit of Prudential Real Estate Investors, the property investment unit of Prudential Financial Inc, according court documents.
The granddaughters said they sold their holdings to Prudential Real Estate after the investment firm agreed to support their campaign to prevent Lone Star from selling its part of the property to a third party, the documents show.
Prudential Real Estate sold the plot to Lone Star in 2014 around the same time that GIC had made a preliminary agreement to buy the property, the court documents showed.
In their lawsuit, the granddaughters asked the court to void the sale to Prudential because it violated their agreement, the documents showed.
A U.S. based spokesman for Prudential Financial declined to comment. The lawyer for the sisters was not available for comment.
The proceeds from selling Meguro Gajoen will help Lone Star repay the approximately 85 billion yen ($837.11 million) it owes to a group of lenders that includes Mizuho Financial Group , Shinsei Bank Ltd, a property unit of Mitsubishi Corp and Goldman Sachs Group Inc, the sources said.
The loans will mature next year. If Lone Star fails to find a buyer by then, it would have to refinance that debt, people with direct knowledge of the matter have said.
Bloomberg had reported on Friday that GIC had backed out of buying the Tokyo property due to the lawsuit.
The land Lone Star is selling includes two office buildings, home to the headquarters of Amazon's Japan operations. It also includes a lavish wedding hall that was built in the 1930s as a restaurant and bathhouse.
$1 = 101.46 Japanese yen Edited by Kevin Krolicki and Miral Fahmy