From: Charles Cox [mailto:firstname.lastname@example.org]
Sent: Monday, August 13, 2012 11:29 AM
To: Charles Cox
Subject: NY Dist Court – Suit for breach of contract and gross negligence managing a CDO, judgment reversed
In plaintiffs’ suit for breach of contract and gross negligence based on defendant’s alleged disregard of its obligation to manage the Collateralized Debt Obligation (CDO) portfolio in favor of its investors, judgment of the district court is reversed and remanded where: 1) the plaintiffs have plausibly alleged that the parties to the contract intended the contract to benefit the investors in the CDO directly and create obligations running from defendant to the investors; 2) plaintiffs have plausibly alleged that the relationship between defendant and the plaintiffs was sufficiently close to create a duty in tort for defendant to manage the investment on behalf of plaintiffs; and 3) plaintiffs have alleged sufficient facts that plausibly suggest that defendant acted with gross negligence in managing the investment portfolio, ultimately leading to the failure of the investment vehicle and plaintiffs’ losses.
See the attached.