$200M MBS Suit Against Citigroup Moved To State Court

Law360, New York (March 14, 2012, 3:38 PM EDT) -- Allstate Insurance Co.’s $200 million suit over risky mortgage-backed securities bought from Citigroup Inc. belongs in state court despite the bankruptcy of a mortgage originator responsible for some loans pooled in the securities, a New York federal judge ruled Tuesday.

U.S. District Judge Richard J. Sullivan agreed with Allstate that the Chapter 11 case of American Home Mortgage Holdings Inc. was not relevant to the insurer’s suit, filed in February 2011 in state court. Citigroup quickly removed the case to federal court on jurisdictional grounds, saying AHM...
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