On September 18, 2015, Justice Shirley Kornreich of the Supreme Court of the State of New York dismissed a $600 million suit brought by Bank of New York Mellon, as securitization trustee ("BNYM"), against WLM Mortgage, LLC, J.P. Morgan Acquisition Corporation, and J.P. Morgan Chase Bank, N.A. BNYM brought the action as trustee for the J.P. Morgan Mortgage Acquisition Trust, Series 2006-WMC2, alleging that the defendants breached contractual representations and warranties as to 1,593 or more of the mortgage loans in the trust. The defendants sought dismissal on the ground that BNYM's put-back claims were time barred under the New York Court of Appeals' decision in ACE v. DB Structured Products. Justice Kornreich held that under ACE, BNYM's claims were untimely because BNYM did not bring them within six years of the closing date of the transaction. The court further held that the trustee did not have a separate claim for the defendants' alleged failure to notify the trustee of breaches of representations and warranties. Decision & Order.
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