Legal Industry News
January 18, 2010
Mortgage Lender Sues Firms for Malpractice, Botching a Deal
ECC Capital Corp. has filed a malpractice lawsuit against both Latham & Watkins and Manatt Phelps & Phillips, claiming that due to the firms’ “incompetent draftsmanship,” ECC Capital suffered more than $50 million in damages in its deal to sell its mortgage-origination business and a subprime loan portfolio to Bear Stearns & Co.
The complaint claims that the two firms drafted an agreement with Bear Stearns that was flawed, incomplete, and contrary to the company’s directions. Among other things, the company says that the agreement should have contained provisions that shifted the risk of early mortgage defaults in the loan portfolio…
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