Following a three-week jury trial in the United States District Court for the District of Minnesota, St. Paul Division, a jury returned a Plaintiffs' verdict in favor of DRC's clients Residential Funding Company ("RFC") and ResCap Liquidating Trust ("ResCap").
DRC provided assistance with focus groups, trial strategy, jury selection, and demonstrative aids.
The case, In Re: RFC and RESCAP Liquidating Trust Litigation, concerned RFC's purchase of home mortgage loans from Home Loan Center, Inc. between 2002 and 2008. RFC was in the business of buying mortgages from banks and then securitizing them into residential mortgage-backed securities. The Defendant, HLC was a bank that made mortgage loans to home buyers. RFC bought individual loans from HLC and other banks and then grouped the loans into securitizations - which were packages of loans that could be sold to investors. In exchange for their investment, the investors received the monthly mortgage payments.
The Plaintiffs claimed that Defendant HLC made false or misleading statements about the characteristics of the mortgage loans when it sold those loans to RFC, and that these false or misleading statements were breaches of the contract between the parties. More specifically, Plaintiffs alleged that the Defendant overstated the ability of the borrowers to repay their mortgages and/or overstated the values of the properties underlying the mortgages. The Plaintiffs sought to recover damages from the Defendant according to the amount of losses that were incurred on the Defendant's loans.
RFC filed for bankruptcy in 2012, and RFC's bankruptcy creditors are now entitled to receive a share of RC's remaining assets, which includes money obtained in lawsuits. The distribution of RFC's remaining assets is being overseen by ResCap.
DRC worked with Quinn Emanuel's William Price, Peter Calamari, Sascha Rand, Jennifer Barrett, Rachael McCracken, Deborah Brown, Anthony Alden, Molly Stephens, Jennifer Battle, Matthew Scheck, John Shaffer, and Isaac Nesser.