On November 17, 2014, Justice Shirley Werner Kornreich of the Supreme Court for the State of New York, New York County approved the stipulation of voluntary discontinuance between Assured Guaranty Municipal Corp., DB Structured Products, Inc., and ACE Securities Corp. DB Structured Products’s third-party claim against Greenpoint Mortgage Funding, Inc. was also voluntarily discontinued. Monoline insurer Assured filed the action in 2010, alleging breaches of representations and warranties in a 2006 RMBS transaction. Stipulation of Voluntary Discontinuance.
Ace Securities Corp.
ACE Files Complaint Re-Asserting Repurchase Claims Dismissed by the First Department
On June 18, trustee HSBC filed suit on behalf of ACE Securities Corp. Home Equity Loan Trust Series 2006-SL2 against DB Structured Products, Inc., a Deutsche Bank Subsidiary, in New York state court. The complaint attempts to revive claims previously dismissed by New York’s First Department intermediate appellate court. In its December 2013 decision, the First Department held that the Trustee’s claims were untimely and that the certificate holder-plaintiffs who initially had brought the claims lacked standing to sue. Plaintiff asserts that the new complaint is properly brought under a procedure that permits refiling a suit within six months after dismissal on certain grounds, alleging that it has cured the deficiencies previously identified by the First Department. In the new action, the plaintiff again alleges that DB Structured Products breached contractual representations and warranties related to mortgage loans underlying the securitization at issue. Complaint.
RMBS Investors File $250 Million Derivative Suit Against HSBC
On March 28, 2012, investors in Ace Securities Corp. Home Equity Loan Trust, Series 2006-SL2 commenced a derivative lawsuit, purportedly on behalf of the Trust, against HSBC Bank, as trustee, and DB Structured Products, Inc., an affiliate of Deutsche Bank, the loan originator. In a summons with notice filed in the Supreme Court of the State of New York, plaintiffs state that they seek $250 million in damages for breach of repurchase obligations, based on alleged misrepresentations about the quality of the loans in the Trust’s collateral pool and borrowers’ ability to pay. The causes of action are for breach of contract and specific performance. Complaint.