Firm Obtains Trial Court Victory Sustaining Client's Claims Against an RMBS Trustee

The Firm obtained a trial court victory in New York State Court on behalf of an investment vehicle that seeks hundreds of millions of dollars in damages against an RMBS trustee. See MLRN LLC v. U.S. Bank N.A., 2019 WL 5963202. The Complaint alleged that the RMBS trustee failed in its duties to the investors of the 62 RMBS trusts at issue in the lawsuit, including failing to provide notices of breaches by various wrongdoers, failing to enforce trust provisions requiring that defective loans be repurchased by the RMBS sponsors, and failing to exercise the trustee’s duties to act as a prudent person (as required by the trusts) following the occurrence of Events of Default.

The RMBS trustee sought to dismiss the Complaint in its entirety, arguing, among other things, that plaintiff’s claims were untimely, that plaintiff’s claims failed to state a claim for relief, and that plaintiff was barred by the terms of the trusts from bringing its claims.

Following briefing and oral argument, Commercial Division Justice Andrew Borrok denied defendant’s motion to dismiss in its entirety, except for very limited portions that have no bearing upon plaintiff’s ability to recover on virtually all of its claims for all 62 trusts at issue. Following the Court’s decision, the RMBS trustee agreed to provide discovery on all 62 trusts at issue, and the case continues in the discovery phase. The RMBS trustee filed a notice of appeal only with respect to one minor portion of the Court’s ruling, and the case continues in the trial court while that interlocutory appeal is pending on that issue.

A copy of the Court’s decision is available here.