New York State Court Dismisses Rescission Claim in RMBS Putback Case

On November 21, Justice Shirley Werner Kornreich of the Supreme Court of the State of New York granted in part defendant DB Structured Products, Inc.’s (DB) motion to dismiss the complaint of ACE Securities Trust 2007-HE1.  The court held that the trust could not obtain rescission of the entire transaction, or “complete refund” damages as to loans that did not breach the bank’s representations and warranties.  The court denied the motion to dismiss, however, to the extent that DB sought an order precluding the trust from maintaining putback claims as to loans that were not identified in the trust’s demand letters.  Decision.