Federal District Court Remands Morgan Stanley MBS Suit to Ohio State Court


On December 20, 2011, Judge S. Arthur Spiegel of the Southern District of Ohio granted the plaintiffs’ motion to remand and denied Morgan Stanley’s motion to transfer to the Southern District of New York an RMBS suit based on the alleged failure to disclose claimed departures from underwriting guidelines. The court found that related-to bankruptcy jurisdiction did not exist given that Defendants had not filed indemnification claims in the bankruptcy of the sole bankrupt originator prior to the bar date. Plaintiffs, which include the Western and Southern Life Insurance Company, bring claims under Section 11 of the Securities Act and Ohio securities blue sky laws. Decision.

Published In: Bankruptcy Updates, Business Torts Updates, Civil Procedure Updates, Finance & Banking Updates, Securities Updates

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