Since 2014, the Firm has represented Lehman Brothers Holdings Inc. (“Lehman”) in pursuing contractual indemnification claims against defendants that sold defective mortgage loans to Lehman’s affiliate, that Lehman thereafter either sold to Fannie Mae or Freddie Mac, or securitized into RMBS Trusts.
In 2014, Lehman settled claims asserted against it by Fannie Mae and Freddie Mac regarding certain defective mortgage loans, and thereafter filed adversary proceedings seeking contractual indemnification from more than 100 mortgage loan sellers that had sold Lehman the defective loans. In 2018, following a Bankruptcy Court estimation proceeding in which Lehman was held liable to certain RMBS Trusts for certain defective loans, Lehman filed scores of new adversary proceedings against mortgage loan sellers, some of whom were the same as those Lehman had sued previously for the Fannie Mae and Freddie Mac settlements. Lehman’s indemnification claims against all of these defendants totaled, in the aggregate, many hundreds of millions of dollars.
In 2019, a large number of mortgage loan sellers filed a motion in Bankruptcy Court challenging (i) the Bankruptcy Court’s jurisdiction over Lehman’s contractual indemnification claims and the adversary proceedings, and (ii) Lehman’s standing to assert its indemnification claims against the defendants.
On August 16, 2022, the Bankruptcy Court (Chapman, J.) rendered a 41-page decision that denied the defendants’ motion in all respects. This favorable ruling is the culmination of the Firm’s representation of Lehman on its indemnification claims, as virtually all of those claims now have been successfully resolved by consensual commercial resolutions.
A copy of the Bankruptcy Court’s Decision is attached.