This week, “New York State Supreme Court Justice Barbara Kapnick dismissed the complaint filed last year by Walnut Place LLC and related entities, saying the lawsuit was premature,” reports Bloomberg Businessweek. “Bank of America’s Countrywide Financial unit was accused of making false representations and warranties about the loans backing the bonds, according to the complaint. Walnut Place owns about $1.4 billion in face value of the securities at issue, it said in court papers.” In its court filing, Walnut Place explained that it was suing Bank of America because the trustee of the bondholders, Bank of New York Mellon (BK), had failed “to enforce the obligation to repurchase loans.”
Bloomberg Businessweek continued by noting that “Walnut Place is a pseudonym used by hedge fund Baupost Group LLC, according to Theodore Mirvis, a Bank of America attorney. Boston-based Baupost, founded by Seth Klarman, is the “real plaintiff” in the case, Mirvis said at a court hearing, according to a transcript.”
The Judge in the matter, New York State Supreme Court Justice Barbara Kapnick, said that the lawsuit was premature because Bank of New York Mellon entered a plea just days before Walnut Place filed suit, asking for more time. Further, there is evidence that Bank of New York Mellon did act upon Walnut Place’s complaints concerning Bank of America and the Countrywide mortgage bonds, “as demonstrated by an $8.5 billion settlement with Bank of America and a group of institutional investors over Countrywide mortgage bonds.” Walnut Place has challenged that settlement and currently awaits court approval.
Per Bloomberg Businessweek, “the case is Walnut Place LLC v. Countrywide Home Loans Inc., 650497-2011, New York State Supreme Court (Manhattan).”