GE 2015 Annual Report Download - page 149

LEGAL PROCEEDINGS
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LEGAL PROCEEDINGS
There are 14 lawsuits relating to pending mortgage loan repurchase claims in which WMC, our U.S. mortgage business that we sold in
2007, is a party. The adverse parties in these cases are securitization trustees or parties claiming to act on their behalf. While the
alleged claims for relief vary from case to case, the complaints and counterclaims in these actions generally assert claims for breach of
contract, indemnification, and/or declaratory judgment, and seek specific performance (repurchase) and/or monetary damages.
Beginning in the fourth quarter 2013, WMC entered into settlements that reduced its exposure on claims asserted in certain
securitizations, and the claim amounts reported herein reflect the effect of these settlements.
Five WMC cases are pending in the United States District Court for the District of Connecticut. Four of these cases were initiated in
2012, and one was initiated in the third quarter 2013. Deutsche Bank National Trust Company (Deutsche Bank) is the adverse party in
four cases, and Law Debenture Trust Company of New York (Law Debenture) is the adverse party in one case. The Deutsche Bank
complaints assert claims on approximately $4,300 million of mortgage loans and seek to recover damages in excess of approximately
$1,800 million. The Law Debenture complaint asserts claims on approximately $800 million of mortgage loans, and alleges losses on
these loans in excess of approximately $425 million.
Four WMC cases are pending in the United States District Court for the District of Minnesota against US Bank National Association (US
Bank), one of which was initiated by WMC seeking declaratory judgment. Three of these cases were filed in 2012, and one was filed in
2011. The Minnesota cases involve claims on approximately $800 million of mortgage loans and do not specify the amount of damages
sought. On September 8, 2014, US Bank filed a petition for instructions in the administration of trusts in Minnesota State Court seeking
authorization and instruction for US Bank to implement the terms of a settlement agreement reached with WMC to compromise, settle,
and release all claims arising out of the securitizations at issue in these four lawsuits. In February 2015, two bondholders filed
objections to the proposed settlement, and in response the court held an evidentiary hearing on February 1, 2016. In light of the state
court action seeking approval of the proposed settlement, the District Court has stayed further proceedings in the four cases until April
2016.
Four cases are pending against WMC in New York State Supreme Court, all of which were initiated by securitization trustees or
securities administrators. These cases involve, in the aggregate, claims involving approximately $4,559 million of mortgage loans. One
of these lawsuits was initiated by Deutsche Bank in the second quarter 2013 and names as defendants WMC and Barclays Bank PLC.
It involves claims against WMC on approximately $1,000 million of mortgage loans and does not specify the amount of damages
sought. The second case, in which the plaintiff is The Bank of New York Mellon (BNY), was initiated in the fourth quarter 2012 and
names as defendants WMC, J.P. Morgan Mortgage Acquisition Corporation and JPMorgan Chase Bank, N.A. BNY asserts claims on
approximately $1,300 million of mortgage loans, and seeks to recover damages in excess of $650 million. The third case was initiated
by BNY in November 2013 and names as defendants WMC, J.P. Morgan Mortgage Acquisition Corporation and JPMorgan Chase
Bank, N.A. In this case, BNY asserts claims on approximately $1,300 million of mortgage loans, and seeks to recover damages in
excess of $600 million. On September 18, 2015, the court granted GHIHQGDQWV¶ motion to dismiss this case on statute of limitations
grounds, and the plaintiff filed a notice of appeal on October 21, 2015. The fourth case was filed in October 2014 and names as
defendants WMC, J.P. Morgan Mortgage Acquisition Corporation and JPMorgan Chase Bank, N.A. The plaintiff, BNY, asserts claims
on approximately $959 million of mortgage loans and seeks to recover damages in excess of $475 million.
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