Baupost Suing Former Bear Mortgage Unit

Sep 14 2012 | 12:16pm ET

The Baupost Group has acknowledged that it is behind a year-old lawsuit that seeks to force a former Bear Stearns unit to buy back more than 1,000 mortgages.

The hedge fund's direction of the litigation, which is filed in the name of the Law Debenture Trust Co. of New York and does not name Baupost, was revealed in an Aug. 15 status report on the litigation, which notes that "the directing certificateholders are the Ashford Square Entities, which are wholly-owned by subsidiaries of funds managed by the Baupost Group."

A lawyer for the Boston-based hedge fund told Reuters that Baupost is indeed behind the litigation. An amended complaint, increasing the number of mortgages that Baupost wants EMC, now a subsidiary of JPMorgan Chase, to buy back from more than 8,000 to more than 1,100, was filed earlier this month.

Baupost alleges that EMC routinely breached representations and warranties made about underlying mortgage loans. According to the amended complaint, 88% of the 1,500 mortgages in a pool were in breach.

EMC has offered to buy back only 54 of the mortgages in question.


In Depth

Q&A: George Schultze On His Fund's Unique Approach to Distressed Investing

Apr 16 2015 | 1:01am ET

George Schultze is a managing member of Schultze Asset Management, a long/short...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Minnesota Supreme Court Rejects The Ponzi Scheme Presumption: Lenders Claw Back Some Of Their Own Rights

Apr 17 2015 | 9:23am ET

A recent court ruling in Minnesota has put an end to the Ponzi Scheme Presumption...

 

Editor's Note