Repurchase Suits to Proceed Against DB Structured Products

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On March 20, Judge Alison J. Nathan of the United States District Court for the Southern District of New York granted in part and denied in part DB Structured Products, Inc.’s, (DBSP) motions to dismiss four lawsuits brought by HSBC Bank as trustee of four different residential mortgage securitization trusts. The court dismissed the trustee’s claims for a declaration that DBSP is required to reimburse the trustee for expenses incurred in enforcing its remedies under the relevant contracts, including costs and attorney’s fees, on the basis that the trustee could seek such reimbursement without the need for declaratory relief. The court denied DBSP’s motion to dismiss the trustee’s breach of contract claims for failure to comply with the contractual requirements for a demand to repurchase allegedly breaching loans, holding that DBSP’s discovery of breaches of representations and warranties was adequately pleaded and provided a sufficient basis for the claims to proceed without evaluating the sufficiency of such demand. The court also allowed claims for damages to proceed. Order.

Topics:  Banks, Repurchases, Structured Financial Products

Published In: Business Torts Updates, Civil Procedure Updates, Finance & Banking Updates, Residential Real Estate Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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