Client Services / Trial / Subprime and Credit Markets Litigation

Subprime and Credit Markets Litigation

McDermott Will & Emery’s Subprime and Credit Markets Litigation Group is composed of lawyers across the Firm who have substantial experience litigating a wide range of issues relating to the credit markets.  The group’s lawyers are particularly knowledgeable about the securitization industry and subprime debt markets.  This includes the process through which securitizations come to market and the structure and function of securitized debt instruments.  Our lawyers are also well versed in the technical accounting literature and principles that apply to securitizations, such as “true sale,” valuation and modeling issues.

Our Subprime and Credit Markets Litigation Group lawyers have extensive experience in representing clients before the U.S. Securities and Exchange Commission (SEC) in matters involving the credit markets and securitizations.  Many of the lawyers in our group are former SEC enforcement lawyers who have a deep understanding of the SEC, its organization, rules, practices, customs and staff.  Our group’s experience is well respected by the SEC, as evidenced by the fact that the agency has, at our request, filed amicus curiae briefs supporting our clients’ positions in private litigation.  The SEC has also called upon members of our group to act as receivers in SEC civil enforcement proceedings.

The group’s lawyers have represented public companies, accounting firms, broker-dealers, investment advisers, underwriters, audit committees and officers, directors and senior management in all types of securities-related litigation, including private class action and derivative litigation.  Our lawyers frequently coordinate highly complex litigation involving civil enforcement proceedings, class and derivative actions, and bankruptcy filings.

Experience

  • Represented a Big Four public accounting firm during government investigations concerning the accounting for off-balance sheet financing of a manufacturing company’s products through the securitization of receivables.   These investigations involved numerous highly technical issues under FAS 140, the primary accounting literature relating to off-balance sheet securitizations.
  • Represented Mercury Finance Company, formerly a New York Stock Exchange company that was engaged in the business of originating subprime auto loans, in more than 60 class action and derivative lawsuits arising from various alleged accounting irregularities.  We also represented Mercury in investigations conducted by the SEC and U.S. Attorney’s Office.  No governmental charges were instituted against Mercury.
  • Represented the insurance commissioner of the State of Delaware in her capacity as receiver of National Heritage Life Insurance Company, in a fraud-based lawsuit seeking to recover tens of millions of dollars in mortgages pledged as collateral for a collateralized mortgage obligation (CMO) purchased by the insurance company before the insurance commissioner placed the insurance company in receivership.  After a two-week evidentiary hearing, the court entered an order defeasing the bond and transferring all of the mortgages to the commissioner.
  • Represented Taylor Capital Group and its principals in multi-district litigation relating to a split-off transaction.  In the transaction, the Cole Taylor Financial Group, which was involved in the subprime auto lending business, was split into two pieces.  Within a year of the transaction closing, various disputes resulted in litigation, which involved fraudulent conveyance claims, breach of fiduciary duty claims and federal securities class action claims.  Cases were filed in Delaware, Illinois and Texas, but were consolidated in Delaware by the panel for multi-district litigation.  The case was settled on a favorable basis to our clients.

Our Subprime and Credit Markets Litigation Group lawyers have significant trial experience, as they have successfully tried numerous civil and criminal cases, and both state and federal administrative proceedings, to verdict.  This experience redounds to our clients’ benefit in all cases, whether settled or tried.

Contacts

Trial Client Services

McDermott Will & Emery

McDermott Will and Emery