Fremont Arm Is Sued by Unit
Of Morgan Stanley
A Wall Street Journal News Roundup
From The Wall Street Journal Online
October 26, 2007
A unit of Morgan Stanley has filed a breach-of-contract lawsuit seeking at least $10 million against a Fremont General Corp. subsidiary related to a series of agreements to purchase residential mortgages.
The lawsuit, filed Tuesday in federal court in Manhattan, alleges Fremont Investment & Loan breached a series of written agreements under which Morgan Stanley Mortgage Capital Inc. purchased hundreds of residential mortgages between May 1, 2005, and Dec. 28, 2006. The breaches caused damages exceeding $10 million, the suit said.
The complaint was filed by Morgan Stanley Mortgage Capital Holdings LLC, the successor-in-interest to the mortgage unit.
Daniel Hilley, a spokesman for Fremont General, said, "The company believes it is without merit, and we intend to oppose it vigorously." The Santa Monica, Calif., company exited its subprime-mortgage business earlier this year and sold its commercial-real-estate lending business, following subprime-market problems.
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