Top Business News

WILMINGTON, Delaware (Reuters) – The fiduciary for smash Thornburg Mortgage Inc has sued nihilist Sachs, Barclays and other bounteous banks for a combined $2.2 billion, blaming them for the former bag loan company's bankruptcy.

The fiduciary filed quaternary removed lawsuits, the most comprehensive of which blames a "collusive scheme" by units of JPMorgan Chase & Co, Citigroup, Royal Bank of Scotland, Credit Suisse and UBS for driving the consort into bankruptcy.

The trustee, Colony lawyer Joel Sher, accused the five banks of performing unitedly to use a program of unjustified edge calls to modify their curb over Thornburg, which was erst a directive provider of "jumbo" bag loans.

The causa seeks to better $2 billon for fraudulent conveyances and transfers by the banks, which had financed Thornburg's mortgage-backed securities.

The fiduciary said the banks yet crowd the Thornburg into Chapter 11 in May 2009. It sought protection from creditors with $36.5 billion in assets, making it one of the large bankruptcies during the financial crisis.

Citigroup and JPMorgan both said the causa was meritless, and JPMorgan also said it would defend its Bear Stearns organisation vigorously.

Credit Suisse and UBS declined to comment. RBS did not directly return a call for comment.

Sher was appointed to separate Thornburg after the company's executives were accused of using Thornburg's body and offices, without creditors' approval, to start a newborn company.

The fiduciary also sued Barclays for improperly control mortgage bonds from Thornburg in 2007 by undervaluing the securities in a program of edge calls. The fiduciary is hunt at small $94 million.

Barclays declined to comment.

Sher sued nihilist Sachs, hunt at small $71 meg and accused the slope of artful to overwhelm hundreds of millions of dollars of investment-grade mortgage bonds that Thornburg had committed as collateral.

Goldman Sachs declined to comment.

The final causa claims Countrywide Home Loans Inc, which was acquired by Bank of America, breached representations and warranties on the loans it oversubscribed to a organisation of Thornburg.

Bank of USA declined to comment.

That causa was also brought on behalf of a group of investors famous as the Pueblo Investors LLC, who were represented by king Grais of Grais & Ellsworth.

Grais has brought numerous "putback" lawsuits that essay to hit originators much as Countrywide repurchase mortgages that fell brief of promised standards but were prepacked into mortgage-backed securities and oversubscribed as top-notch investments.

Investors holding hundreds of zillions of dollars of mortgage bonds hit been hoping to agitate their losses from the bonds back to the banks that prepacked the bonds, but it has been a struggle.

In part, that is because the loans are held in trusts that oversubscribed the mortgage bonds. The trustees overseeing the trusts hit been reluctant to work with investors and go after the originators of the loans, although that may be changing.

The Thornburg putback causa is based in conception on a "joint prosecution agreement" between the mortgage bond fiduciary and the Pueblo investors. Grais said it was the first causa that he knew of that was based on much an agreement.

Thornburg is today famous as TMST Inc and the lawsuits were filed as conception of the bankruptcy, which is In re TMST Inc U.S. Bankruptcy Court, District of Maryland, No. 09-17787.

(Editing by Steve Orlofsky, physiologist Orr and Richard Chang)

Source