breach of representation

Court Grants HSBC’s Motion to Dismiss Trustee Repurchase Action

On October 17, Justice Marcy S. Friedman of the Supreme Court of the State of New York granted HSBC’s motion to dismiss a repurchase suit brought by Deutsche Bank, as Trustee for HSI Asset Securitization Corp. Trust 2007-NC1.  The Trustee asserted two causes of action:  one for breach of the cure and repurchase obligation in the agreement governing the trust, and one for failure to notify the Trustee of alleged underlying breaches of representations and warranties.  Following several of her prior decisions, Justice Friedman dismissed both of the Trustee’s claims because non-compliance with the repurchase protocol—a remedial provision in the contract—does not give rise to an actionable breach separate from the underlying breach of the representations and warranties.  Justice Friedman granted the Trustee leave to amend to assert a claim for breach of representations and warranties.  Order.