Fourteen institutional investors represented by the law firm Gibbs & Bruns LLP are supporting the Lehman Brothers bankruptcy plan administrator's offer to settle certain securitized mortgage repurchase claims with securities' trustees.
The administrator would request that the court allow the trusts' $2.41 billion claim regardless of evidence presented as part of the binding offer, according to the law firm.
In return, the trustees would waive their right to appeal a bankruptcy court decision as long as the court determines a claim greater than $2 billion.
"Resolutions like this one have been transformative for the market and for investors," said Robert Madden, counsel for the institutional investors involved.
The many investor lawsuits related pre-crisis RMBS have taken several years to play out and both sides have gotten increasingly eager to cut through the considerable red tape that surrounds them. Issuers originally brought the private-label bonds involved in the settlement offer between 2002 and 2005.
The institutional investors who are parties to the agreement are AEGON USA Investment Management, BlackRock Financial Management Inc., Cascade Investment, the Federal Home Loan Bank of Atlanta, Goldman Sachs Asset Management, Invesco Advisers Inc., Kore Advisors, Metropolitan Life Insurance Co., Pacific Investment Management Co., Sealink Designated Activity Co. through investment manager Neuberger Berman Europe Ltd., The TCW Group Inc., Thrivent Financial for Lutherans, Voya Investment Management and Western Asset Management Co.
Trustees for the 244 pre-crisis RMBS trusts involved will have until June 1 to accept the settlement. The offer calls for the court to determine the allowed amount of the repurchase claims submitted through a proceeding that would start in October.