[co-author: James Fee]

On December 23 and 24, Commerzbank AG filed four actions in the Southern District of New York against Deutsche Bank National Trust Company, HSBC Bank USA, N.A., Wells Fargo Bank, N.A., and the Bank of New York Mellon in their capacities as trustees for a number of RMBS trusts. Commerzbank, as an RMBS investor, alleges that the trustees violated their contractual, fiduciary, and statutory duties by, among other things, failing to address servicers’ “looting” of the trusts. Commerzbank further alleges that the trustees failed to act to defend the trusts’ interest against misconduct by sponsors and originators for the deals at issue. The complaints in these actions are substantially similar, and closely parallel other RMBS cases alleging violations of the Trust Indenture Act and the Streit Act, as well as breach of contract, breach of fiduciary duty, negligence and breach of the covenant of good faith. We have previously covered similar suits by the National Credit Union Administration and Pacific Investment Management Company. Representative Complaint.