Morgan Stanley 2015 Annual Report Download - page 33

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. The complaint
seeks, among other relief, rescission of the mortgage loan purchase agreements underlying the transactions, specific
performance and unspecified damages and interest. On August 16, 2013, the court granted in part and denied in part the
Company’s motion to dismiss the complaint.
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. Plaintiff 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. By order entered September 30, 2014, the court
granted in part and denied in part the Company’s motion to dismiss the amended complaint. On July 13, 2015, plaintiff
perfected its appeal from the court’s September 30, 2014 decision.
On December 14, 2012, Royal Park Investments SA/NV filed a complaint against the Company, certain affiliates, and other
defendants in the Supreme Court of NY, styled Royal Park Investments SA/NV v. Merrill Lynch et al. On October 24, 2013,
plaintiff filed a new complaint against the Company in the Supreme Court of NY, styled Royal Park Investments SA/NV v.
Morgan Stanley et al., alleging that defendants made material misrepresentations and omissions in the sale to plaintiff of
certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total
amount of certificates allegedly sponsored, underwritten and/or sold by the Company to plaintiff was approximately $597
million. The complaint raises common law claims of fraud, fraudulent inducement, negligent misrepresentation, and aiding
and abetting fraud and seeks, among other things, compensatory and punitive damages. The plaintiff filed an amended
complaint on December 1, 2015.
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 the
complaint.
On January 31, 2013, HSH Nordbank AG and certain affiliates filed a complaint against the Company, certain affiliates, and
other defendants in the Supreme Court of NY, styled HSH Nordbank AG et al. v. Morgan Stanley et al. 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. The total amount of certificates
allegedly sponsored, underwritten and/or sold by the Company to plaintiff was approximately $524 million. The complaint
alleges causes of action against the Company for common law fraud, fraudulent concealment, aiding and abetting fraud,
negligent misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On April 12,
2013, defendants filed a motion to dismiss the complaint, which was granted in part and denied in part on July 21, 2015. On
August 19, 2015, the Company filed a Notice of Appeal of the court’s decision, and on August 20, 2015, the plaintiffs filed a
Notice of Cross-Appeal. On August 25, 2015, the plaintiffs filed a motion for leave to amend their complaint.
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
27