On October 7, 2008, in a decision that could affect other litigation relation to Countrywide Financial, Judge Sue Robinson dismissed the consolidated shareholders’ derivative lawsuit pending in Delaware federal court against the company, as nominal defendants, and ten of its former directors and officers. A copy of the October 7 opinion can be found here
Companies Collapse, Preferred Shareholders Sue
The full consequences of the dramatic recent events in the financial markets may take years to emerge, but one direct effect has already appeared – the collapse of several large financial institutions has turned preferred shareholders into securities class action plaintiffs.
Historically, securities class action lawsuits have been pursued on behalf of common shareholders
Upstreaming Subprime Losses
According to news reports (here), MBIA has filed a lawsuit breach of contract lawsuit in New York state court against Countrywide Financial Corp. (now part of Bank of America) alleging that Countywide made fraudulent misrepresentations about is loan underwriting standards in connection with the securitization of over $14 billion of securities for which
More Damn Things to Worry About
The stock market, that omnipresent and all-purpose barometer of all human sentiment and endeavor, was back up today. So, everything’s fine, right? Congress will get back to work, pass the bailout bill (of course, we all knew we really needed it all along, it was just an election year test, you see) and then we
Does Dismissal Foreshadow Subprime Litigation Culmination?
Allegations that the defendant companies and their senior managers failed to disclose the hazards associated with the company’s risky investments. Allegations that management failed to account for losses on high risk investments in a timely or complete manner. Allegations that company management minimized the deteriorating values of high risk investments in piecemeal damage control statements
WaMu: A Thrift Falls in the Forest
Amidst all of the tumult over the Fed bailout and the Presidential debates, not to mention a host of other events large and small, news about WaMu’s collapse has already slipped from the front pages of the nation’s newspapers. Astonishingly, in one short weekend, events have superseded the largest bank failure in U.S. history.
Another “New Wave” Credit Crisis Lawsuit
In my preceding post, I wrote about a possible new wave of credit crisis lawsuits, where the defendant companies are not themselves directly affected by credit crisis fallout, but instead suffer from exposure to other companies that have been directly affected. In a litigation example of these circumstances at work, plaintiffs’ lawyers today initiated another
Litigation Wave Inflection Point?
The economic crisis that began as the subprime meltdown has clearly entered a dark new phase. And just as the prior stages of the crisis generated waves of related litigation, this new phase already has produced its own distinctive round of lawsuits. Like the underlying economic circumstances, the new litigation phase also seems darker and
Securities Lawsuit Allegations Target Auction Rate Investor
Since the earliest days of the subprime litigation wave, one of the recurring questions has been whether the wave would spread beyond the financial sector. The question remains, but allegations in a new securities lawsuit suggest that circumstances arising from the subprime crisis are affecting a diverse variety of companies, and by extension the claims
First the Government Takeover, Then the Lawsuit
When news of the federal government’s seizure of mortgage giants Fannie Mae and Freddie Mac became public, it became apparent that the government’s move was bad news for the holders of the companies’ common and preferred stock.
The Wall Street Journal’s front page September 8, 2008 article (here) commented that the government