During the years 2005, 2006, 2007 and 2008, the Western and Southern Life Insurance Company and its affiliates (“Western & Southern”) purchased residential mortgage backed securities with a face value of $538 million. The Bank of New York Mellon (“BNYM”) was the Trustee for the Trusts which issued these securities. After the securities declined in value, Western & Southern sued the Trustee, alleging that BNYM breached its contractual, fiduciary and statutory duties to the Trusts and that these failures caused Western & Southern to suffer over $100 million of damages. Among other things, Plaintiffs alleged the Trustee failed to exercise due care in negotiating a settlement of the Trusts’ claims against Countrywide, the entity from whom the Trusts purchased mortgages, and Countrywide’s parent, Bank of America.
Mayer Brown LLP, counsel for BNYM, retained Compass Lexecon and its President, Professor Daniel R. Fischel to evaluate the settlement. Professor Fischel filed a report, opining that the settlement with Countrywide and Bank of America was reasonable and adequate, and also testified at deposition. Subsequent to Professor Fischel’s deposition, Plaintiffs decided not to pursue the claim challenging the settlement. After a multi-month trial in the first half of 2017, Judge Steven E. Martin of the Court of Common Pleas in Cincinnati, Ohio ruled in favor of the BNYM on all issues, stating that he found “no merit in any of the claims of the plaintiffs.” The result was a complete victory for BNYM.
The Bank of New York Mellon was successfully represented at trial by Matthew D. Ingber, Michael Martinez, Christopher J. Houpt, Allison J. Zolot and Silvia A. Babikian of Mayer Brown LLP. The Compass Lexecon consulting team was headed by Jerry Lumer, and included Kevin Hartt, Anne Marie Yale, Erika Morris and Donnie Hong.