Credit Agricole Loses $478M Claim Over Repo Deal

Law360, New York (February 17, 2011, 3:44 PM EST) -- The Third Circuit has squashed a $478 million claim Credit Agricole SA lodged against bankrupt American Home Mortgage Holdings Inc., in a decision that could define how the courts value mortgage repurchase deals.

A three-judge panel of the U.S. Court of Appeals for the Third Circuit on Wednesday upheld a lower court loss for Credit Agricole, saying that dysfunctional markets cannot be used to value so-called repo agreements.

In a repo agreement, a mortgage lender sells a portfolio of mortgages with the understanding that the buyer...
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