Firm Secures $1.84 Billion Settlement for Ambac in Mortgage-Backed Securities Suits
Patterson Belknap secured a settlement on behalf of its client, Ambac Assurance Corporation, in a series of lawsuits against Bank of America entities, including Countrywide (which Bank of America acquired in 2008), related to residential mortgage backed securities (“RMBS”) insured by Ambac. The settlement resolves all of Ambac’s claims against Bank of America and related entities. It comes after 15 days of trial in Ambac’s first and largest case against Bank of America and Countrywide, in which Patterson Belknap attorneys put on several witnesses before New York State Supreme Court Justice Robert R. Reed.
The firm first filed the suit on behalf of Ambac in September 2010, when Ambac sued Countrywide Home Loans, Inc., in New York State Supreme Court alleging claims with respect to 12 RMBS transactions involving Countrywide mortgage loans, which was later amended to cover an additional 5 Countrywide transactions. In the same complaint, Ambac also sued Bank of America Corporation on a theory of successor liability. The firm also filed a separate case against Countrywide and Bank of America in 2014 concerning an additional 8 transactions, as well as a case in 2012 against Bank of America affiliates First Franklin Financial Corporation and Merrill Lynch involving an additional RMBS transaction. All three matters have been resolved through this settlement.
The Patterson Belknap team included Jacqueline Bonneau, Muhammad Faridi, Harry Sandick, Alexander Shapiro, Peter Tomlinson, and Jason Vitullo.
In a press release issued October 7, 2022, Claude LeBlanc, Ambac’s President and Chief Executive Officer, stated, "Ambac is very pleased to have reached this settlement with Bank of America, which materially advances our strategic priority to progress AAC to a stable runoff and further maximizes optionality for our legacy financial guaranty business."
To read Ambac’s announcement, click here.