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  • Stephen Plotnick Quoted by Law360 Regarding Judgment in Monoline Insurer’s Lawsuit Against Flagstar

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Stephen Plotnick Quoted by Law360 Regarding Judgment in Monoline Insurer’s Lawsuit Against Flagstar

Litigation partner Stephen M. Plotnick was quoted in the February 6 Law360 article “Assured’s $90M Win Gives Insurers Ammo Against Banks.” In entering judgment in favor of Assured Guaranty, Judge Rakoff rejected Flagstar’s defense that it should not be liable for loans that did not default within 12 months of origination because Assured can’t show that loan defects were to blame for its losses. Plotnick said the ruling, which he called a ‘game-changer,’ could signal the death knell for similar loss causation arguments being made by other originators in related litigation. “The banks have been saying: ‘You’ve got to show these loan defects were the cause of the loan defaults and therefore of your losses,’” Plotnick said. “Judge Rakoff basically rejected that.”

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