Morgan Stanley 2014 Annual Report Download - page 50

damages. On January 22, 2014, the court granted defendants’ motion to dismiss with respect to claims arising
under the Securities Act of 1933 and denied defendants’ motion to dismiss with respect to claims arising under
Texas Securities Act and the Illinois Securities Law of 1953. On April 28, 2014, the court granted in part and
denied in part the plaintiff’s motion to strike certain of the defendants’ affirmative defenses. On July 11, 2014,
the defendants filed a motion for reconsideration of the court’s order on the motion to dismiss the complaint or,
in the alternative, for certification of interlocutory appeal and a stay of all proceedings, which the court denied on
September 30, 2014. On November 17, 2014, the plaintiff filed an amended complaint.
On November 6, 2013, Deutsche Bank, in its capacity as trustee, became the named plaintiff in Federal Housing
Finance Agency, as Conservator for the Federal Home Loan Mortgage Corporation, on behalf of the Trustee of
the Morgan Stanley ABS Capital I Inc. Trust, Series 2007-NC3 (MSAC 2007-NC3) v. Morgan Stanley Mortgage
Capital Holdings LLC, and filed a complaint in the Supreme Court of NY under the caption Deutsche Bank
National Trust Company, solely in its capacity as Trustee for Morgan Stanley ABS Capital I Inc. Trust, Series
2007-NC3 v. Morgan Stanley Mortgage Capital Holdings LLC, as Successor-by-Merger to Morgan Stanley
Mortgage Capital Inc. The complaint asserts claims for breach of contract and breach of the implied covenant of
good faith and fair dealing and alleges, among other things, that the loans in the trust, which had an original
principal balance of approximately $1.3 billion, breached various representations and warranties. The complaint
seeks, among other relief, specific performance of the loan breach remedy procedures in the transaction
documents, unspecified damages, rescission, interest and costs. On December 16, 2013, the Company filed a
motion to dismiss the complaint.
On December 24, 2013, Commerzbank AG London Branch filed a summons with notice against the Company
and others in the Supreme Court of NY, styled Commerzbank AG London Branch v. UBS AG et al. Plaintiff
purports to be the assignee of claims of certain other entities. The complaint, which was filed on May 20, 2014,
alleges that the Company made material misrepresentations and omissions in the sale to plaintiff’s assignors 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 plaintiffs’
assignors was approximately $185 million. The complaint asserts causes of action against the Company for
common law fraud, fraudulent concealment, and aiding and abetting common law fraud and fraudulent
concealment and seeks, among other things, compensatory and punitive damages. The Company and other
defendants moved to dismiss the complaint on December 5, 2014.
On December 30, 2013, Wilmington Trust Company, in its capacity as trustee for Morgan Stanley Mortgage
Loan Trust 2007-12, filed a complaint against the Company. The matter is styled Wilmington Trust Company v.
Morgan Stanley Mortgage Capital Holdings LLC et al. 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 $516 million, breached various representations and
warranties. The complaint seeks, among other relief, unspecified damages, interest and costs. On February 28,
2014, the defendants filed a motion to dismiss the complaint.
On January 15, 2014, the FDIC, as receiver for United Western Bank filed a complaint against the Company and
others in the District Court of the State of Colorado, styled Federal Deposit Insurance Corporation, as Receiver
for United Western Bank v. Banc of America Funding Corp., et al. The complaint alleges that the Company made
untrue statements and material omissions in connection with the sale to United Western Bank of mortgage pass-
through certificates backed by securitization trusts containing residential mortgage loans. The amount of
certificates allegedly sponsored, underwritten and/or sold to United Western Bank by the Company was
approximately $75 million. The complaint raises claims under both federal securities law and the Colorado
Securities Act and seeks, among other things, compensatory damages associated with plaintiff’s purchase of such
certificates. On February 14, 2014, the defendants filed a notice removing the litigation to the United States
District Court for the District of Colorado. On March 14, 2014, the plaintiff filed a motion to remand the action.
On April 30, 2014, the defendants filed a motion to dismiss the complaint.
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