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March 2014: Complete Dismissal For CIFG Against Fortis Bank Entity

March 2014

Quinn Emanuel recently succeeded in winning a complete dismissal of a complaint filed against its client CIFG Assurance North America, Inc. (“CIFG”) in the New York State Supreme Court, Commercial Division. Plaintiff Royal Park Investments, SA/NV – a special purpose vehicle formed to hold Fortis Bank assets – owned a portion of a mortgage backed securities bond issuance insured by CIFG. CIFG and Plaintiff RPI subsequently entered into an arrangement whereby CIFG made a payment to RPI and obtained the right to recover any insurance payments it made on RPI’s bonds — in effect canceling the insurance as it related to RPI’s bonds. After the securities defaulted and CIFG paid out the insurance proceeds to the bond holders (and recovered the payment it made on behalf of RPI’s bonds), CIFG liquidated the collateral and collected the proceeds of the liquidation from the indenture trustee.

RPI brought suit claiming that it had not agreed to forego its share of the liquidated collateral and that CIFG was unjustly enriched. Quinn Emanuel moved to dismiss and for summary judgment on the basis that the language in the governing documents was unambiguous. The Commercial Division adopted Quinn Emanuel’s arguments in full, dismissing RPI’s claims with prejudice.