Kasowitz Secures Trial Victory In Long-Standing RMBS Put-Back Action for MBIA Insurance
In a decision issued on November 30, 2020, Justice Jennifer G. Schecter of the Supreme Court of New York, New York County, has held that, during a two-week bench trial capping over ten years of litigation, Kasowitz Benson Torres, on behalf of client MBIA Insurance, proved that Credit Suisse breached its representations and warranties to MBIA concerning a failed residential mortgage-backed securitization Credit Suisse sponsored and MBIA guaranteed and is liable to MBIA for damages, which we expect will amount to over even the $680 million Credit Suisse itself has acknowledged. Justice Schecter found that MBIA “convincingly proved . . . that more than half of the securitized loans were materially non-conforming” and that Credit Suisse must therefore reimburse MBIA for the value of those loans, based on a “[t]horough examination of the evidence . . . [which] prove[d] [Credit Suisse’s defenses] wrong,” including its contention that the losses suffered were merely the result of the “inherently risky” nature of the mortgage loans and its “hollow interpretations of applicable warranties that would render them valueless.”
The Kasowitz team representing MBIA is led by partners Marc E. Kasowitz and Kenneth R. David, and includes partners Edward E. Filusch and Sarmad M. Khojasteh, special counsel Henry Brownstein and Alycia Regan Benenati, and associates Michelle Genet Bernstein, Jonah M. Block and Christine M. Rodriguez. MBIA is also represented by co-counsel at Patterson Belknap Webb & Tyler LLP.