Defunct global investment bank Bear Stearns has come out on top of a lawsuit filed against it challenging its 2007 decision to auction off mortgage-backed securities from a bankrupt lender.
On May 31, U.S. Bankruptcy Judge Kevin J. Carey of the District of Delaware ruled that the Chapter 7 trustee’s challenge failed. The case stems from Bear Stearns’ acquisition and subsequent auctioning off of lender HomeBanc’s mortgage-backed securities as its own after HomeBanc defaulted on a securities repurchasing agreement and later declared bankruptcy.
