INV has nice lawsuit to recover some losses - per 10Q:
Item. 1. Legal Proceedings
On January 3, 2001, the Company filed a lawsuit in the California Superior Court in San Diego seeking to recover damages
arising from its purchase of a pool of residential mortgage loans from Lehman Capital, a Division of Lehman Brothers
Holdings, Inc., in late 1997 and early 1998. In addition to Lehman Capital, the lawsuit names Long Beach Mortgage Company,
Inc. as a defendant.
The complaint seeks damages for losses arising out of the Company's agreement to purchase loans from Lehman Capital, which
had acquired the loans from Long Beach Mortgage Co. Lehman Capital assigned the loans and its agreement with Long Beach
Mortgage Co. to the Company. The complaint alleges, among other claims, that Lehman Capital and Long Beach Mortgage
Co. breached their obligations to the Company under the purchase agreements for the sale of the loans. The complaint also
seeks recovery from Lehman Capital and Long Beach Mortgage Co. for negligent misrepresentations made in connection with the
sale of the loans. The complaint alleges damages for the losses incurred due to Lehman Capital and Long Beach Mortgage Co.'s
failure to repurchase a number of these loans, which damages are estimated to exceed $5,000,000, for additional damages
including repayment of all, or a portion of, the premium paid to Lehman Capital on such loans and for damages equal to the
lost return on the loans, measured as if the loans had performed as represented.
The Company believes that its present allowance is adequate to cover future losses arising from the matters alleged in the
complaint. Litigation expenses expected to be incurred in prosecuting the lawsuit have not been provided for and will reduce
earnings in future periods as the suit progresses. The timing and amount of such expenses are uncertain.
The lawsuit is presently in the discovery phase. The outcome of litigation is always uncertain and the facts involved in the
allegations of the Company's lawsuit are complex. No assurance can be given that the Company will recover all or any portion
of the amounts claimed. No resolution can be expected to occur for an extended period of time. |
