In a decision issued late yesterday, P Kevin Castel, a judge in the U.S. District Court, Southern District of New York, ruled against a class action suit versus Countrywide Financial Corp.
The summary judgment ruling is the first time a court has held that the class action tolling rule of American Pipe & Construction Co. v. Utah does not apply to the Securities and Exchange Act of 1933’s statute of repose.
The plaintiffs in this case were two hedge funds that are managed by investment manager Old Hill Partners. These funds are ABS and MBS investors and, at their peak in 2006, held $700 million in assets on behalf of insitutional and other investors. From June to October 2006, they bought around $43 million of RMBS from Countrywide through two securitizations, CWABS ABS Certificates Series 2006-SPS1 and 2006-SPS2.
The district court found that the Securities and Exchange Act of 1933’s statute of repose had lapsed before the plaintiffs had filed the suit, so they were not entitled to relief. Bingham McCutchen defended Countrywide in this case.
For a copy of the of the ruling please see link below.