Proposed Class Accuses Deutsche Bank of Improperly Using Funds for Legal Defense


On August 4, 2017, Royal Park Investments SA/NV filed a proposed class action against Deutsche Bank National Trust Co. (“DBNTC“) in the U.S. District Court for the Southern District of New York, claiming that DBNTC—in its capacity as RMBS Trustee for ten trusts—is improperly using trust proceeds to finance its defense against separate litigation, brought by the same Plaintiff, alleging that DBNTC breached its duties as RMBS Trustee.  Plaintiff’s complaint acknowledges that the relevant governing agreements contain language entitling DBNTC to indemnification under certain circumstances but argues that, nonetheless, New York law prohibits such indemnification where the indemnified costs are incurred in a lawsuit between the indemnifying parties.  The complaint seeks an injunction barring DBNTC from further use of the trust’s assets to fund its litigation defense and asks the court to order an accounting of legal expenses recouped to date. Read the complaint here.