SDNY Dismisses Claims Against Bank of America

On August 25, 2011, Judge Sweet of the Southern District of New York dismissed two causes of action brought by BNP Paribas and Deutsche Bank against Bank of America. BNP Paribas and Deutsche Bank collectively held nearly $1.7 billion in notes issued by Ocala Funding LLC. Bank of America served as Indenture Trustee, Collateral Agent, Depositary, and Custodian for Ocala Funding. Plaintiffs allege that Bank of America improperly sold the mortgage loans that served as collateral for the notes, despite assuring plaintiffs that it was holding the loans for the noteholders’ benefit. Further, according to plaintiffs, Bank of America never distributed any sales proceeds to the noteholders. Judge Sweet granted Bank of America’s motion to dismiss, noting that plaintiffs did not themselves own the loans, but rather owned only the notes. Decision.