New York State Court Dismisses RMBS Putback Action Against Nomura As Time-Barred

Orrick - Finance 20/20
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On May 10, Justice Sherwood of the Supreme Court of the State of New York dismissed on statute of limitations grounds an RMBS putback action brought against Nomura Credit & Capital, Inc. (Nomura). Plaintiff alleged that Nomura breached representations and warranties concerning mortgage loans securitized in a $259 million RMBS trust and sought to compel Nomura to buy back the loans or rescind the entire transaction. Justice Sherwood held that plaintiff’s claim for breach of contract accrued at the time of the transaction – when the representations were made – not when Nomura declined to repurchase allegedly breaching loans. Applying that accrual date, Justice Sherwood found the claims untimely. The amended complaint was filed by the trustee more than six years after the time of the transaction, and it did not relate back to the filing of the original complaint and summons with notice because the original hedge fund plaintiffs lacked standing to sue under the governing agreements. Orrick, Herrington & Sutcliffe represents Nomura in this case. Order.

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