Bankrupt Subprime Lender Fights To Reclaim $1.5M

Law360, New York (February 4, 2009, 12:00 AM EST) -- Mortgage Lenders Network USA Inc. has filed an adversary complaint against Sovereign Bank to recover nearly $1.5 million it claims was illegally transferred after the subprime mortgage lender filed for Chapter 11.

In its complaint, filed in the U.S. Bankruptcy Court for the District of Delaware on Tuesday, Mortgage Lenders claims that $1,478,000 was transferred without court authority to the federal savings bank a week after the lender filed a voluntary petition for Chapter 11 protection on Feb. 5, 2007, amid the subprime meltdown.

The dispute...
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