Credit-Based Asset Servicing and Securitization LLC Investor Securities Class Action Lawsuit 12/12/2008

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Company Name(s): 
Credit-Based Asset Servicing and Securitization LLC
Case Name: 
Credit-Based Asset Servicing and Securitization LLC Case 12/12/2008
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
12/12/2008
Class Period Begin: 
04/26/2007
Class Period End: 
12/12/2008
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
02/13/2009
Date Settled: 
12/15/2011
Settlement Amount: 
$315,000,000
Deadline to Participate in Settlement: 
04/25/2012
Summary: 

September 11, 2012 - The court approved the distribution plan of net settlement fund.

May 8, 2012 - The court approved the attorneys' fees and expenses.

May 7, 2012 - The court entered the orders approving the plan of allocation and issued an order and judgment.

March 21, 2012 - The court held a final settlement hearing and approved the settlement and plan of allocation.

December 15, 2011 - The court preliminarily approved the settlement.

June 16, 2011 - The court granted plaintiffs' motion and class representatives and class counsel were appointed.

March 23, 2011 - Plaintiffs filed a motion to appoint class representatives and class counsel.

November 8, 2010 - The court granted in part and denied in part the defendants' motion to dismiss.

August 6, 2010 - Defendants filed a motion to dismiss.

July 6, 2010 - The lead plaintiff filed an amended consolidated complaint.

March 31, 2010 - The court granted in part and denied in part the defendants' motion to dismiss.

June 17, 2009 - Defendants filed a motion to dismiss.

June 5, 2009 - All additional cases were were consolidated.

April 23, 2009 - The lead plaintiff and lead counsel were appointed.

April 2, 2009 - All cases were consolidated.

February 17, 2009 - Another lead plaintiff motion was filed.

February 2, 2009 - A lead plaintiff motion was filed.

December 12, 2008 - An investor in Certificates of Credit-Based Asset Services Securitization LLC filed a lawsuit in the U.S. District Court for the Southern District of New York against Credit-Based Asset Services and Securitization LLC over alleged violations of Federal Securities Laws between April 26, 2007 and December 12, 2008.

According to the complaint the plaintiff charges Credit-Based Asset Services Securitization, Merrill Lynch Mortgage Investors Inc, certain of its officers and directors, the issuers and underwriters of the Certificates with violations of the Securities Act of 1933. The complaint alleges that during 2007 the defendants caused two Registration Statements to be filed with the SEC in connection with and for the purpose of issuing billions of dollars of Certificates. The Certificates were issued pursuant to the Prospectus Supplements, each of which was incorporated into one of the Registration Statements. The Certificates were supported by pools of mortgage loans.

The complaint charges that Credit-Based Asset Services Securitization the Registration Statements and Prospectus Supplements included false statements and/or omissions about: (i) the underwriting standards used by the loan originators; (ii) the standards and guidelines used by Merrill Lynch when evaluating and acquiring the loans; (iii) the appraisal standards used to value the properties collateralizing the loans, and the corresponding loan-to-value ratios of the loans; (iv) the credit enhancement supporting the loan securitization process; and (v) the pre-established ratings assigned to each tranche of Certificates issued pursuant to the offering documents.

By December 2007, the truth about the performance of the mortgage loans that secured the Certificates began to be revealed to the public, increasing the risk of the Certificates receiving less cash flow in the future and the likelihood that investors would not receive it on a timely basis. The credit rating agencies also began to put negative watch labels on the Certificates, ultimately downgrading many. As a result, the Certificates were no longer marketable at prices near the price paid for them, and the holders of the Certificates were exposed to much more risk with respect to both the timing and absolute cash flow to be received than the Registration Statements and Prospectus Supplements represented.

The class includes purchasers of the following classes of C-BASS 2007-CB4 Trust Certificates:

Certificates CUSIP
A-1A 1248MEAA7
A-1B 1248MEAB5
A-1C 1248MEAC3
A-2A 1248MEAD1
A-2B 1248MEAE9
A-2C 1248MEAF6
A-2D 1248MEAG4
M-1 1248MEAH2
M-2 1248MEAJ8
M-3 1248MEAK5
M-4 1248MEAL3
M-5 1248MEAM1
M-6 1248MEAN9
B-1 1248MEAP4
B-2 1248MEAQ2
B-3 1248MEAR0
B-4 1248MEAS8