Lehman Lost Right To Recoup Bad Loans, Mortgage Cos. Say

By Rick Archer (October 16, 2019, 5:21 PM EDT) -- Counsel for some of the mortgage originators facing $1.2 billion in claims from Lehman Brothers for allegedly selling it bad loans told a New York bankruptcy judge Wednesday that the bankrupt investment firm gave up its indemnification rights against them.

Arguing in an omnibus motion seeking dismissal of 23 adversary proceedings before U.S. Bankruptcy Judge Shelley Chapman, counsel for the mortgage originators claimed Lehman lost whatever rights it may have had against them when it shuffled the allegedly bad loans between different divisions of the investment firm.

The adversary action at issue concerns Lehman's $767 million settlement with Freddie Mac and...

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