In a recent post (here), I described the "new wave" of credit crisis lawsuits, in which the companies involved were damaged by their exposures to other companies experiencing credit crisis losses. The latest of these new wave lawsuits to be filed involves the Federal Agricultural Mortgage Corporation, or "Farmer Mac" as it
credit crisis
Dismissal Denied in New Century Subprime Lawsuit
Following closely on the heels of the denial of the motion to dismiss in the Countrywide case earlier this week (about which refer here), on December 3, 2008, Judge Dean Pregerson of the Central District of California issued an opinion (here) denying the defendants’ motions to dismiss in the New Century Financial…
The Evolving Credit Crisis Litigation Wave
In an earlier post (here), I suggested that the credit crisis litigation wave had reached an inflection point, and in subsequent posts, I identified additional "new wave" credit crisis lawsuits.
The exact contours of this "new wave" is admittedly amorphous, but the basic concept is that it involves, first, companies that…
Web Notes and Updates
FDIC Report: More Bank Failures Coming?: The FDIC’s Quarterly Banking Profile for the third quarter 2008 (here), released on November 25, 2008, paints a dismal picture of the banking industry.
Among other things, the Report notes that during the third quarter the number of insured institutions on the FDIC’s "Problem List" increased…
More Bad Bank Blues
The closure of three more banks this past Friday night underscores the difficult environment now facing many banks and also suggests that the pace of bank failures is accelerating. These developments may also have important implications for the D&O insurance placement market banks may have to confront in the months ahead.
On November 21…
First the Home Loan Workout, Then the Investor Lawsuit?
On November 11, 2008, Citigroup (here) and Fannie Mae and Freddie Mac (here) announced plans to modify existing home loans in an attempt to help borrowers avoid further foreclosures.
These mortgage relief efforts unquestionably are constructive, even praiseworthy. But as noted on the Real Time Economics blog (here)…
Credit Crisis Insurance Losses: How Big?
This past week, in conjunction with the PLUS International Conference in San Francisco, the insurance information firm Advisen issued an updated forecast of insurance losses likely to arise from the credit crisis. As reflected in its November 5, 2008 press release (here), Advisen is now estimating aggregate D&O and E&O losses of $9.6…
Wrong-Way Bets Beget Losses and Lawsuits
One of the more distressing side effects of the recent dramatic events in the global financial markets has been the sudden and unexpected reversal of fortune on any number of financial transactions and positions, particularly with respect to commodities and currencies. These developments have proven to be particularly troublesome for market participants that sought to…
Debt Woes, Tough Times and Securities Litigation
At first glance, poultry producer and processor Pilgrim’s Pride and shopping center REIT General Growth Properties would seem to have little in common. But while they may be in different business sectors they share a remarkable number of common woes.
Both are laboring under crushing debt obligations associated with recent acquisitions, and both face…
Global Bailouts, U.S. Lawsuits?
The calamity that began as a U.S.-based subprime mortgage meltdown has now grown into a global financial crisis that has resulted in bankruptcies and bailouts involving some of the world’s largest financial institutions. Along the way, these financial institutions’ investors have seen their investment interests damaged or destroyed, leaving many angry and aggrieved. If a…