Morgan Stanley Must Face Suit Over Toxic Mortgages

Law360, New York (August 18, 2011, 6:50 PM EDT) -- The Delaware Supreme Court on Thursday overturned a lower court's decision in favor of a Morgan Stanley unit, saying mortgage loan servicer Central Mortgage Co.'s breach of contract suit against the firm over toxic mortgages should not have been dismissed.

Delaware Chancery Court Vice Chancellor Leo E. Strine had ruled that CMC failed to provide Morgan Stanley adequate notice of its alleged breaches of contract, but the appeals court ruled en banc that CMC had satisfied the minimal pleading standards required at the early stage of...
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