Where Servicer and Originator Were the Same, Originator’s Failure to Cure Defective Loans Constituted Servicer Failure to Perform Event of Default
ABS Update / Claims Against Trustees

Where Servicer and Originator Were the Same, Originator’s Failure to Cure Defective Loans Constituted Servicer Failure to Perform Event of Default

On September 21, 2023, Judge Engelmayer of the S.D.N.Y, issued a decision in Ambac Assurance Corporation v. U.S. Bank, 17 Civ. 2614 (PAE) (KHP), holding that where the servicer and originator were the same, the originator’s failure to cure defective loans was a servicer failure to perform event of default. Continue reading Where Servicer and Originator Were the Same, Originator’s Failure to Cure Defective Loans Constituted Servicer Failure to Perform Event of Default

Court Dismisses Claim Against Servicer for Failing to Give Notice of Representation and Warranty Breaches Fails Because Originator Would Have Ignored Any Demand Made on It
ABS Update / Put-Back Actions

Court Dismisses Claim Against Servicer for Failing to Give Notice of Representation and Warranty Breaches Fails Because Originator Would Have Ignored Any Demand Made on It

On September 19, 2023, Justice Crane of the New York County Commercial Division issued a decision in HSBC Bank USA, N.A. v. Nomura Credit & Capital, Inc., 2023 NY Slip Op. 33252(U), dismissing a claim against Ocwen for failing to give Nomura notice of representation and warranty breaches because Normura would have refused to cure any breaches of which it was given notice . . . Continue reading Court Dismisses Claim Against Servicer for Failing to Give Notice of Representation and Warranty Breaches Fails Because Originator Would Have Ignored Any Demand Made on It

Court Rejects Champerty Defense Where Plaintiffs Had Purchased Defaulted Bonds with the Intention of Suing to Collect on Them
ABS Update / Champerty / Champerty / Commercial Case Notes

Court Rejects Champerty Defense Where Plaintiffs Had Purchased Defaulted Bonds with the Intention of Suing to Collect on Them

On August 28, 2023, Justice Crane of the New York County Commercial Division issued a decision in Fortelus Funds Invs. Trust v. Hellas Telecom. (Luxembourg) II SCA, 2023 NY Slip Op. 32978(U), rejecting a champerty defense where the plaintiffs had purchased defaulted bonds with the intention of suing to collect on them . . . Continue reading Court Rejects Champerty Defense Where Plaintiffs Had Purchased Defaulted Bonds with the Intention of Suing to Collect on Them

Assignment of Claims for Purpose of Suing on Them to Recover Damages Not Champertous
ABS Update / Champerty / Champerty / Commercial Case Notes

Assignment of Claims for Purpose of Suing on Them to Recover Damages Not Champertous

On March 1, 2023, Justice Crane of the New York County Commercial Division issued a decision in IKB Intl. S.A. v. Morgan Stanley, 2023 NY Slip Op. 30614(U), holding that an assignment of claims for the purpose of suing on them to recover damages was not champertous . . . Continue reading Assignment of Claims for Purpose of Suing on Them to Recover Damages Not Champertous

Certificateholder Cannot Sue a Third-Party Without Complying with the No-Action Clause, Even When the Trustee Consents
ABS Update / Put-Back Actions

Certificateholder Cannot Sue a Third-Party Without Complying with the No-Action Clause, Even When the Trustee Consents

On March 2, 2023, the First Department issued a decision in Freedom Trust 2011-2 v. DB Structured Prods., Inc., 2023 NY Slip Op. 01136, holding that a certificateholder cannot sue a third-party without complying with the no-action clause, even when the trustee consents . . Continue reading Certificateholder Cannot Sue a Third-Party Without Complying with the No-Action Clause, Even When the Trustee Consents