On March 31, 2015, Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York denied HSBC Bank USA, National Association’s (“HSBC”) motion to dismiss an action brought by a consortium of investors in RMBS for lack of subject matter jurisdiction. The plaintiffs’ Complaint alleges, inter alia, that HSBC failed to discharge its duties as Trustee for 271 RMBS Trusts in violation of the Trustee Indenture Act (“TIA”) and state common law. Because the TIA governs only 27 of the 271 Trusts at issue, the plaintiffs invoked supplemental jurisdiction as the basis for the court to hear the claims as to the remaining 244 Trusts. Judge Scheindlin denied HSBC’s motion, holding that the plaintiffs’ claims all arise from the “same nucleus of operative fact” because the relevant governing agreements all contain substantially similar contract provisions and impose similar duties on HSBC in its capacity as Trustee. Judge Scheindlin added that judicial economy would be served by retaining supplemental jurisdiction as proof of both the TIA and non-TIA claims would require depositions of many of the same witnesses. Order.
Tom Kidera helps navigate companies through crisis. Whether handling sensitive investigations or litigating billion-dollar cases, Tom brings a creative approach and dogged dedication to his clients and their needs. As a partner in the firm's Complex Litigation and Dispute Resolution group, Tom represents auditing firms, financial institutions, and the Firm's infrastructure clients in complex commercial litigation and regulatory enforcement proceedings.
He is particularly knowledgeable about issues of force majeure and catastrophic market disruption, having served on a team of Orrick lawyers whose force majeure-related victory on behalf of long-time client, Hemlock Semiconductor LLC, was declared a Top 10 Business Case of 2010-2019 by the Michigan Bar Journal.
Tom represents audit firms and accountants in regulatory proceedings commenced by the SEC and the PCAOB as well as civil litigations. He has experience managing and conducting large scale internal investigations, liaising with regulators, remediating problems, and managing risk and liability in delicate circumstances.
Tom also has litigated structured finance issues for his entire career, representing securitization sponsors and mortgage loan servicers in an array of litigations from securities fraud and loan repurchase disputes to ERISA and consumer class actions, also consulting and advising on the interpretation of securitization documents and events of default.
In addition, Tom advises the Firm's energy and infrastructure clients on litigation matters, previously having served as a member of the Orrick team representing Hemlock Semiconductor (a leading producer of solar-grade polycrystalline silicon) in commercial proceedings throughout the U.S. and around the globe.
Tom maintains an active pro bono practice representing asylum seekers and U.S. veterans seeking discharge status upgrades. Tom is also active in firm recruiting and retention efforts, serving on the hiring and summer program committees in New York, as well as the Professional Development Committee. He was a summer associate in the firm’s New York office in 2009.
Posts by: Thomas Kidera
RMBS Claims Against Ratings Agencies Dismissed as Time-Barred
On March 27, 2015 Judge John Robert Blakely of the U.S. District Court for the Northern District of Illinois granted Standard & Poor’s Financial Services, LLC’s and Moody’s Investors Service, Inc.’s motion to dismiss claims brought by First National Bank and Trust Co. of Rochelle, Illinois arising out of First National’s purchase of certain RMBS certificates. First National asserted causes of action under the Illinois Consumer Fraud and Deceptive Business Practices Act, the Uniform Deceptive Trade Practices Act, as well as other common law misrepresentation claims, alleging that it had been induced to purchase the certificates in reliance upon misstatements by the ratings agencies. Judge Blakely dismissed the complaint as time-barred by the Illinois Securities Law’s five-year statute of repose. He first concluded that the ISL’s statute of repose applied to First National’s claims because the facts alleged, if proven, would have established a violation of the ISL sections on fraud or deceit in connection with the purchase or sale of securities, and because the ISL specifically provided for the injunctive relief requested by First National. Judge Blakely then found all claims untimely because the RMBS certificates at issue were purchased in February 2008, five years and four months before First National’s suit was filed. Order.
Bank of America Settles RMBS Suit
On April 2, 2015, plaintiffs BNP Paribas Mortgage Corporation and BNP Paribas and defendant Bank of America filed a Joint Stipulation of Dismissal with Prejudice stating that both parties had reached an agreement to settle claims arising out of Bank of America’s handling of $480.7 million worth of mortgage-backed notes issued by Taylor Bean and Whitaker’s Ocala Funding LLC. Plaintiffs Complaint alleged that Bank of America, which served as agent, custodian, depositor, and Indentured Trustee of the Ocala facility, failed to live up to its contractual obligations to secure and protect the cash and mortgage loans collateralizing the notes. The details of the settlement are not yet public. Joint Stipulation.