Monday’s Adjudication Roundup

NY bankruptcy judge dismissed suit against DLA Piper for misappropriation of over $36 million in payments to cover mortgage-backed securities. The judge cited NY law that “prevents wrongdoers and their successors from pursuing claims that arise out of their own misconduct.”
NY federal judge denied “Act of God” defense made by National Electronic Transit Corporation for damage caused to machines stored in warehouse during Hurricane Sandy, instead finding that the company was under-prepared for the storm.
RBS Securities has settled to pay $129.6 million for claims made by the National Credit Union Administration for the sale of mortgage-backed securities, which may have led to the failure of two credit unions.
NY federal court denied Citibank’s bid to relate FDIC’s suit over failure as trustee for mortgage-backed securities to a suit accusing the bank of mishandling mortgage-backed securities in pooled loans.

Building investors sue Waterbridge Capital LLC for $10 million for allegedly selling units and pocketing profits, refusing to pay back its investors.
Hurricane Sandy $25 million contract-insurance suit is dismissed against one of the defendants, Arch Insurance Group and its subsidiary, because the underlying policy limits hadn’t been reached and thus Arch did not have any liability.
In $189 million mortgage fraud suit, the federal government claims that Wells Fargo cannot access documents it withheld because “the release of some documents doesn’t waive protects for all of them.”
The Federal Deposit Insurance Corp. sues US Bank and Citigroup, Inc. for allegedly failing as trustee of residential mortgage-backed securities leading to a $695 million loss to the insurance fund.

New Jersey Condominium Association files a complaint alleging that the U.S. Federal Emergency Management Agency (FEMA) breached its contracts by failing to pay flood insurance benefits for damage from Hurricane Sandy.
The US Supreme Court justices are reviewing an Eleventh Circuit decision that allows second-mortgage liens to disappear for Chapter 7 debtors when the first mortgage is undersecured. The justices expressed concern in letting this happen.
Federal Deposit Insurance Corp. suit against RBS Securities Inc. for $140 million over residential mortgage-backed securities is dismissed as time-barred under recent US Supreme Court ruling in CTS Corp. v. Waldburger.
UBS Americas Inc. has settled confidentially with Capital Ventures International over alleged $109 million of risky mortgage-backed securities.

Shareholders of Deutsche Bank petitioned for cert to the U.S. Supreme Court to clarify the standard for a claim for pleading a fraudulent claim under Section 11 of the Securities Act of 1933 following the Second Circuit tossing their suit in July 2014.
10^th Circuit revives National Credit Union Administration’s $550 million suit against Barclays for misrepresentation of the quality of over $555 million in RMBS.
First wave of Hurricane Sandy cases settle with FEMA and insurers over the improper cutting of the homeowners’ payouts following the storm.

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