JPM Art. 77 -- Trustee Response to Motion to (the first two requests) could bear on the Trustees’…

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  • SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

    In the matter of the application of

    U.S. BANK NATIONAL ASSOCIATION, THE BANK OFNEW YORK MELLON, THE BANK OF NEW YORKMELLON TRUST COMPANY, N.A., WILMINGTON TRUST,NATIONAL ASSOCIATION, LAW DEBENTURE TRUSTCOMPANY OF NEW YORK, WELLS FARGO BANK,NATIONAL ASSOCIATION, HSBC BANK USA, N.A., andDEUTSCHE BANK NATIONAL TRUST COMPANY (asTrustees under various Pooling and Servicing Agreements andIndenture Trustees under various Indentures), AEGON USAInvestment Management, LLC (intervenor), BayerischeLandesbank (intervenor), BlackRock Financial Management,Inc. (intervenor), Cascade Investment, LLC (intervenor), theFederal Home Loan Bank of Atlanta (intervenor), the FederalHome Loan Mortgage Corporation (Freddie Mac) (intervenor),the Federal National Mortgage Association (Fannie Mae)(intervenor), Goldman Sachs Asset Management L.P.(intervenor), Voya Investment Management LLC (f/k/a lNGInvestment LLC) (intervenor), Invesco Advisers, Inc.(intervenor), Kore Advisors, L.P. (intervenor), LandesbankBaden-Wurttemberg (intervenor), Metropolitan Life InsuranceCompany (intervenor), Pacific Investment ManagementCompany LLC (intervenor), Sealink Funding Limited(intervenor), Teachers Insurance and Annuity Association ofAmerica (intervenor), The Prudential Insurance Company ofAmerica (intervenor), the TCW Group, Inc. (intervenor),Thrivent Financial for Lutherans (intervenor), and Western AssetManagement Company (intervenor),

    Petitioners,

    for an order, pursuant to CPLR 7701, seeking judicialinstruction, and approval of a proposed settlement.

    Index No. 652382/2014

    Friedman, J.

    Motion Sequence No. __

    THE TRUSTEES MEMORANDUM OF LAW IN OPPOSITIONTO OBJECTORS MOTION TO COMPEL DISCLOSURE

    (Counsel listed on inside cover)

    FILED: NEW YORK COUNTY CLERK 07/14/2015 11:36 PM INDEX NO. 652382/2014NYSCEF DOC. NO. 459 RECEIVED NYSCEF: 07/14/2015

  • JONES DAYRobert C. MichelettoNina Yadava222 East 41st StreetNew York, New York 10017(212) 326-3939

    Matthew A. MartelJoseph B. Sconyers100 High Street, 21st FloorBoston, Massachusetts 02110(617) 960-3939

    Attorneys for PetitionerU.S. Bank National Association

    ALSTON & BIRD LLPMichael E. JohnsonJared M. SladeJames M. Tourangeau90 Park AvenueNew York, New York 10016(212) 210-9400

    Attorneys for PetitionerWilmington Trust, NationalAssociation

    FAEGRE BAKER DANIELS LLPRobert SchnellStephen M. MertzMichael M. Krauss2200 Wells Fargo Center90 S. Seventh StreetMinneapolis, Minnesota 55402(612) 766-6000

    Attorneys for PetitionerWells Fargo Bank, NationalAssociation

    MORGAN LEWIS & BOCKIUS LLPMichael S. KrautKurt W. Rademacher101 Park AvenueNew York, New York 10178-0060(212) 309-6000

    Attorneys for PetitionerDeutsche Bank National TrustCompany

    MAYER BROWN LLPMatthew D. IngberChristopher J. Houpt1221 Avenue of the AmericasNew York, New York 10020(212) 506-2500

    Attorneys for PetitionersThe Bank of New York Mellon andThe Bank of New York MellonTrust Company, N.A.

    SEWARD & KISSEL LLPM. William MunnoDale C. Christensen, Jr.Thomas Ross HooperOne Battery Park PlazaNew York, New York 10004(212) 574-1200

    Attorneys for PetitionerLaw Debenture Trust Company ofNew York

    MAYER BROWN LLPJean-Marie L. AtamianJames Ancone1221 Avenue of the AmericasNew York, New York 10020(212) 506-2500

    Attorneys for PetitionerHSBC Bank USA, N.A.

  • TABLE OF CONTENTS

    Page

    -i-

    PRELIMINARY STATEMENT ................................................................................................... 1

    ARGUMENT................................................................................................................................. 4

    I. THE TRUSTEES HAVE AGREED TO PRODUCE ALL RELEVANTDOCUMENTS....................................................................................................... 4

    A. These Proceedings Concern Only The Trustees SettlementConduct. ..................................................................................................... 4

    B. The Settlement Documents Produced By The Trustees Include AllOf The Documents And Information That Could Conceivably BeRelevant In This Special Proceeding. ........................................................ 5

    II. THE OBJECTORS DISCOVERY REQUESTS ARE UNNECESSARY,IRRELEVANT, AND OVERBROAD.................................................................. 7

    A. Alleged Conflicts of Interest ...................................................................... 8

    B. Alleged Bad Faith .................................................................................... 15

    C. Alleged Unreasonable Investigation ........................................................ 18

    D. Alleged Events of Default........................................................................ 19

    E. Distribution .............................................................................................. 22

    CONCLUSION............................................................................................................................ 24

  • TABLE OF AUTHORITIES

    Page(s)

    -ii-

    CASES

    ACE Sec. Corp. v. DB Structured Prods., Inc.,112 A.D.3d 522 (1st Dept 2013) ............................................................................................22

    Andon ex rel. Andon v. 302-304 Mott St. Assocs.,94 N.Y.2d 740 (2000) ................................................................................................................4

    Andrews v. Trustco Bank, N.A.,289 A.D.2d 910 (3d Dept 2001) ...............................................................................................4

    Argonaut Pship L.P. v. Bankers Tr. Co.,No. 96 Civ.1970 (LLS), 2001 WL 585519 (S.D.N.Y. May 30, 2001) ....................................20

    Arrowgrass Master Fund Ltd. v. Bank of New York Mellon,No. 651497/10, 2012 WL 8700416 (Sup. Ct. N.Y. Cnty. Feb. 24, 2012) .........................20, 21

    In re Bank of New York Mellon,127 A.D.3d 120 (1st Dept 2015) .................................................................................... passim

    In re Bank of New York Mellon,No. 651786/11, 2014 WL 1057187 (Sup. Ct. N.Y. Cnty. Jan. 31, 2014)............................4, 12

    In re Beeman,108 A.D.2d 1010 (3d Dept 1985) .............................................................................................4

    Capoccia v. Spiro,88 A.D.2d 1100 (3d Dept 1982) ...............................................................................................8

    Carver v. Bank of New York Mellon,No. 13-10005-MLW, 2014 WL 6983431 (D. Mass. Dec. 10, 2014).......................................10

    CFIP Master Fund, Ltd. v. Citibank, N.A.,738 F. Supp. 2d 450 (S.D.N.Y. 2010)..................................................................................9, 13

    Dabney v. Chase Natl Bank,196 F.2d 668 (2d Cir. 1952)...................................................................................................8, 9

    Georgetown Unsold Shares, LLC v. Ledet,2015 WL 3756873 (2d Dept June 17, 2015) ............................................................................8

    Haynes v. Haynes,72 A.D.3d 535 (1st Dept 2010) ................................................................................................4

  • TABLE OF AUTHORITIES(continued)

    Page

    -iii-

    HEAT 2006-5 ex rel. U.S. Bank Natl Assn v. DLJ Mortg. Capital, Inc.,No. 652344/12, 2014 WL 27961 (Sup. Ct. N.Y. Cnty. Jan. 3, 2014)......................................22

    In re IBJ Schroder,No. 101580/98, slip op. (Sup. Ct. N.Y. Cnty. Aug. 16, 2000)...................................................4

    Lonray, Inc. v. Newhouse,229 A.D.2d 440 (2d Dept 1996) ...............................................................................................8

    Magten Asset Mgmt. Corp. v. Bank of New York,No. 600410/10, 2007 WL 1326795 (Sup. Ct. N.Y. Cnty. May 8, 2007)........................... 20-21

    MBIA Ins. Corp. v. Countrywide Home Loans, Inc.,27 Misc. 3d 1061 (Sup. Ct. N.Y. Cnty. 2010) .......................................................................... 8

    Millennium Partners v. US Bank Natl Assn,No. 12-cv-7581, 2013 U.S. Dist. LEXIS 55729 (S.D.N.Y. Apr. 17, 2013) ............................21

    Nacional Financiera, S.N.C. v. Bankers Trustee Co.,Index No. C121131-98 (Sup. Ct. N.Y. Cnty. Nov. 13, 2000) .................................................21

    Page Mill Asset Mgmt. v. Credit Suisse First Boston Corp.,No. 98-cv-6907 (MBM), 2000 WL 877004 (S.D.N.Y. June 30, 2000)...................................13

    Putman High Yield Trust v. Bank of New York,7 A.D.3d 439 (1st Dept 2004) ................................................................................................21

    Royal Park Invs. SA/NV v. HSBC Bank USA, Natl Assn,No. 14-cv-8175 (SAS), 2015 WL 3466121 (S.D.N.Y. June 1, 2015) .....................................13

    Walnut Place LLC v. Countrywide Home Loans, Inc.,96 A.D.3d 684 (1st Dept 2012) ..............................................................................................22

    Williams v. City of New York,41 A.D.3d 468 (2d Dept 2007) .................................................................................................7

    STATUTES

    Comm. Div. Rule of Practice 11-a.................................................................................................14

    CPLR 3101(a) ..................................................................................................................................5

    CPLR 3122(c) ....................................................................................................................

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