Goldman Can't Escape $110M MBS Suit By German Bank

Law360
December 6, 2013


Martis Alex pleased with judge's decision to proceed with MBS suit against Goldman Sachs

Goldman Sachs Group Inc. must face allegations it lied to HSH Nordbank AG about the quality of the loans in $110 million worth of mortgage-backed securities, a New York state judge has ruled, finding that it hadn't waited too long to sue under German law.

Judge Melvin L. Schweitzer sustained most of the allegations in the German bank's complaint, finding that the claims weren't time-barred by Germany's three-year statute of limitations because it was too early to tell if news reports from late 2007 should have alerted HSH Nordbank that German banks and investors were considering U.S. litigation over housing issues well before 2011 when it signed a tolling agreement with Goldman Sachs.

Martis Alex of Labaton Sucharow LLP, who represents HSH Nordbank, told Law360 on Friday that she was pleased with the decision, which she said was particularly important because it upheld the German's bank's statute of limitations, rescission and fraud arguments.