Nomura Asset Capital Corp. hired Cadwalader, Wickersham & Taft LLP to form a trust comprised of some $1.8 billion in securitized mortgage loans which were allegedly represented to be in compliance with the Internal Revenue Code's Real Estate Mortgage Investment Conduit (REMIC) regulations.
In late 2000, when several of those loans "experienced difficulty," the trustee filed suit against Nomura alleging that one of the mortgage loans violated REMIC's requirements. After settling for about $67.5 million, Nomura sued its former attorneys -- Cadwalader -- alleging malpractice.
When Cadwalader sought copies of Nomura's communications with trust-litigation counsel, the New York County Supreme Court denied that request.
On appeal, the Appellate Division, First Department, also rebuffed Cadwalader's argument that those materials were discoverable (or that Nomura had waived attorney-client privilege).
While the settlement's "reasonableness" was "at issue," the attorney-client communications Cadwalader wanted weren't relevant or necessary to the firm's defense of the malpractice case brought by its former client.
To view a copy of the Appellate Division's decision, please use this link: Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP