Tranche Standing Clause Samples

Tranche Standing. With respect to whether plaintiff has standing to pursue claims on behalf of purchasers in tranches other than those in which they invested, the Court finds that ▇▇▇▇ has class standing to pursue claims on behalf of (i) purchasers of MBS tied to the same loan group as PABF’s MBS; or (ii) purchasers of MBS cross-collateralized by the loan group backing PABF’s MBS. Relying on In re Washington Mutual Mortgage-Backed Securities Litigation, 276 F.R.D. 658 (W.D. Wash. 2011) (“In re WaMu”), defendants argue that ▇▇▇▇ only has standing to sue on behalf of purchasers of the same tranches PABF purchased. In In re WaMu, PABF, along with two other institutional investors, brought Securities Act claims, against WaMu, WAAC, and Washington Capital Corp., alleging misrepresentations and omissions in offering documents related to the underwriting standards pursuant to which the loans underlying six WaMu trusts (all of which are at issue in this action (see Compl. Ex. A)) were originated. In re WaMu, 276 F.R.D. at 662. There, Judge ▇▇▇▇▇▇▇ held that ▇▇▇▇ lacked standing to represent investors in any tranche in which PABF itself did not invest because each tranche was a separate security (as understood by the Securities Act) in that it “has its own CUSIP, credit rating, risk profile, payment rights, payment priority, principal balance, and interest rate.” Id. at 663. The In re WaMu decision is distinguishable in two ways. First, the decision was outside of this Circuit and before NECA-IBEW. Second, the decision was based largely upon the standing requirements set forth by section 11 of the Securities Act, although the In re WaMu Court found that the determination was “in line with principles of Article III standing.” In re WaMu, 276 F.R.D. at 163 (quoting 15 U.S.C. § 77k(a)), 164. Thus, this Court does not find the In re WaMu decision persuasive on the question of tranche-based standing in this breach of contract action, particularly in light of the Second Circuit’s decision in NECA-IBEW. What is critical to the tranche-based standing inquiry here is how plaintiff’s alleged injury flows within the respective Trusts themselves. See NECA-IBEW, 693 F.3d at 162-63. Although the Court is not concerned with whether the Trustee’s duties cut across all tranches (under the PSAs terms they do), the question for class standing here is whether a diminution in value to one tranche may affect the value of another thus, implicating the “same set of concerns” for tranche-holders across the ...