Fund Managers Sue Deutsche Bank for Breach of Contract and Fiduciary Duty
On June 18, financial institutions including BlackRock Inc., Pacific Investment Management Co., Prudential Financial Inc., DZ Bank AG, and Charles Schwab Co., sued Deutsche Bank National Trust Company in New York state court. The suit alleges that Deutsche Bank breached contractual representations and warranties, knew there were defects in the loan origination process, and breached its fiduciary duty as to 544 RMBS trusts for which it served as trustee. The plaintiffs also allege that the servicers of the trusts failed to give notice of the representation and warranty breaches or to enforce repurchase obligations, and that Deutsche Bank knew of these issues. The complaint asserts six causes of action: (1) breach of contract; (2) violation of the Trust Indenture Act; (3) negligent breach of pre-default duty of independence; (4) breach of the fiduciary duty of care; (5) negligent breach of the duty of care; and (6) breach of the post-default fiduciary duty of independence. The plaintiffs seek damages and costs. Complaint.