Alison Frankel: In BofA successor liability issue, whose law applies?

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Alison Frankel: In BofA successor liability issue, whose law applies?

Alison Frankel: In BofA successor liability issue, whose law applies?

REUTERS LEGAL-

One of the fascinating aspects of the mortgage-backed securities litigation against Countrywide and its parent, Bank of America, has been the bifurcation between federal cases under the oversight of U.S. District Judge Mariana Pfaelzer in Los Angeles and state court cases overseen by Supreme Court Justice Eileen Bransten in New York. There’s some distinction between the issues before the two judges: Many of the cases Pfaelzer is presiding over involve claims under the federal securities laws in addition to allegations of state-law fraud and negligent misrepresentation, while Bransten’s focus has been on state-law contract issues in claims by bond insurers. But the underlying facts before the two judges are pretty much the same (as are many of the lawyers).

Last Friday Pfaelzer ruled, for the second time, that Countrywide MBS investors cannot proceed with claims that BofA is liable for Countrywide’s alleged wrongs. Just as she did last February in Allstate’s case, Pfaelzer found that MassMutual had not come up with sufficient facts to support assertions that BofA’s 2008 acquisition of Countrywide was a fraudulent transfer or a de facto merger that would make the bank legally responsible for Countrywide liability. MassMutual, like Allstate, is represented by Quinn Emanuel Urquhart & Sullivan, the firm that (as I’ve previously noted) has devoted more resources to and made m ore progress in battling C ountrywide and Bank of America than anyone else in MBS litigation. Pfaelzer’s dismissal of another set of Quinn Emanuel successor liability claims doesn’t bode well for Countrywide MBS investors hoping to get their hands on BofA’s money.

[REUTERS-ON THE CASE]

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