On October 24, 2016, in a hard fought lawsuit in Utah, a long awaited decision came down against Aurora Bank, FSB (“Aurora”) and Aurora Loan Services (“ALS”) in favor of Security National Mortgage Company (“Security National”). Security National won a several million dollar judgment in Utah against Aurora and ALS on December 24, 2014. After a motion for summary judgment in this Utah case, which involved a 2007 Indemnification Agreement between Security National and Aurora, the court held that Lehman Bank could only assign rights for losses it had suffered. Lehman Bank had no losses because of the way they structured their transactions with LBHI, and it had been fully compensated by LBHI.
This case is significant to AMLG clients, and any defendant involved in the LBHI litigation pending in the Southern District of New York, and is being watched, because the ruling based on depositions of several LBHI and Aurora key executives essentially renders the assignments under which LBHI is pursuing all 3,000 counterparties in New York worthless. The basic premise is that you can only assign the rights you possess. If Lehman Bank had no damages then it assigned LBHI no damages to pursue. All this time since 2014, the parties in Utah have been fighting over claims of an offset, or reduction in the amount awarded to Security National in 2014, and a demand that Security National continue to pay Aurora under the Indemnification Agreement. Finally, Aurora and ALS lost, leaving Security National entitled to recover several million dollars from LBHI. All they have to do now is collect.
If you are facing claims by LBHI, no matter how small, our expert team of lawyers have been handling these cases against LBHI for years. Contact James Brody to discuss how we can help you resolve yours.