Morgan Stanley 2014 Annual Report Download - page 262

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
part the Company’s motion to dismiss. On September 3, 2014, the Company filed its answer to the complaint.
Based on currently available information, the Company believes that it could incur a loss in this action of up to
approximately $149 million, plus pre- and post-judgment interest, fees and costs.
On August 8, 2012, U.S. Bank, in its capacity as Trustee, filed a complaint on behalf of Morgan Stanley
Mortgage Loan Trust 2006-14SL, Mortgage Pass-Through Certificates, Series 2006-14SL, Morgan Stanley
Mortgage Loan Trust 2007-4SL and Mortgage Pass-Through Certificates, Series 2007-4SL against the Company.
The complaint is styled Morgan Stanley Mortgage Loan Trust 2006-14SL, et al. v. Morgan Stanley Mortgage
Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc. and is pending in the
Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that
the loans in the trusts, which had original principal balances of approximately $354 million and $305 million
respectively, breached various representations and warranties. On October 9, 2012, the Company filed a motion
to dismiss the complaint. On August 16, 2013, the court granted in part and denied in part the Company’s motion
to dismiss the complaint. On September 17, 2013, the Company filed its answer to the complaint. On
September 26, 2013, and October 7, 2013, the Company and the plaintiffs, respectively, filed notices of appeal
with respect to the court’s August 16, 2013 decision. The plaintiff is seeking, among other relief, rescission of the
mortgage loan purchase agreements underlying the transactions, specific performance and unspecified damages
and interest. Based on currently available information, the Company believes that it could incur a loss in this
action of up to approximately $527 million, plus pre- and post-interest, fees and costs.
On September 28, 2012, U.S. Bank, in its capacity as Trustee, filed a complaint on behalf of Morgan Stanley
Mortgage Loan Trust 2006-13ARX against the Company styled Morgan Stanley Mortgage Loan
Trust 2006-13ARX v. Morgan Stanley Mortgage Capital Holdings LLC, as successor in interest to Morgan
Stanley Mortgage Capital Inc., pending in the Supreme Court of NY. U.S. Bank filed an amended complaint on
January 17, 2013, which asserts claims for breach of contract and alleges, among other things, that the loans in
the trust, which had an original principal balance of approximately $609 million, breached various
representations and warranties. The amended complaint seeks, among other relief, declaratory judgment relief,
specific performance and unspecified damages and interest. On September 25, 2014, the court granted in part and
denied in part the Company’s motion to dismiss. Based on currently available information, the Company believes
that it could incur a loss in this action of up to approximately $173 million, plus pre- and post-judgment interest,
fees and costs.
On January 10, 2013, U.S. Bank, in its capacity as Trustee, filed a complaint on behalf of Morgan Stanley
Mortgage Loan Trust 2006-10SL and Mortgage Pass-Through Certificates, Series 2006-10SL against the
Company. The complaint is styled Morgan Stanley Mortgage Loan Trust 2006-10SL, et al. v. Morgan Stanley
Mortgage Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc. and is
pending in the Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among
other things, that the loans in the trust, which had an original principal balance of approximately $300 million,
breached various representations and warranties. The complaint seeks, among other relief, an order requiring the
Company to comply with the loan breach remedy procedures in the transaction documents, unspecified damages,
and interest. On August 8, 2014, the court granted in part and denied in part the Company’s motion to dismiss.
On September 3, 2014, the Company filed its answer to the complaint. Based on currently available information,
the Company believes that it could incur a loss in this action of up to approximately $197 million, plus pre- and
post-judgment interest, fees and costs.
On May 3, 2013, plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed a
complaint against the Company, certain affiliates, and other defendants in the Supreme Court of NY. The
complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiffs of
certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans.
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