* Ruling could impact investors with billions in claims
* Investors thought claims were protected
By Tom Hals
WILMINGTON, Del., March 17 Countrywide
Financial Corp (BAC.N) won the dismissal of an investor lawsuit
in a ruling that could dent other cases that collectively seek
billions of dollars related to soured mortgage-backed bonds.
U.S. District Judge Kevin Castel in Manhattan did not rule
on the merits of the case in a decision issued on Thursday.
Instead, he said investors waited too long to bring their
lawsuit against Countrywide, whose executives allegedly hid
details about the poor-quality loans backing the bonds.
Two hedge funds, Footbridge Limited Trust and OHP
Opportunity Limited Trust, had argued they had the right to
bring the case because they opted out of a Countrywide
class-action lawsuit that was filed within the legal time
The complaint also named Bank of America, which bought
Countrywide in 2008, and three Countrywide executives.
"Investors who thought their claims were protected are
finding they are not," said Daniel Brockett, an attorney from
law firm Quinn Emanuel Urquhart Oliver & Hedges LLP who
represents the funds. "It potentially impacts lots of
institutional investors because judges are making exceptions
way after the fact."
In a summary judgment ruling, Castel cited a three-year
limit for bringing the lawsuit.
The investors' complaint was filed on Jan. 15, 2010, more
than three years after the funds purchased $43 million of
mortgage-backed bonds at the center of dispute.
The related class-action case was filed in a California
court in November 2007.
"It's an odd ruling," said Adam Pritchard, a professor at
the University of Michigan Law School. He said a timely
class-action case generally protects claims of investors who
choose later to bring their own lawsuit.
"I would appeal," he said.
Castel in September dismissed another lawsuit against
Countrywide by the two funds, which are managed by Old Hill
Partners of Darien, Connecticut. In that ruling, he said there
was not sufficient evidence for the case to proceed.
The case is Footbridge Limited Trust and OHP Opportunity
Limited Trust v Countrywide Financial Corp et al, U.S. District
Court, Southern District of New York, No. 10-367.
(Reporting by Tom Hals; Editing by Tim Dobbyn)