The lawsuit by American Residential Investment Trust, Inc. seeks damages of at least $5 million in naming Long Beach Mortgage Company, Inc. as a defendant. The complaint alleges losses arising from the REIT's agreement to purchase loans from Lehman Capital, which had acquired a loan portfolio from Long Beach Mortgage Co., and assigned the loans and the agreement with Long Beach Mortgage Co. to American Residential.
The lawsuit alleges, among other claims, that Lehman Capital and Long Beach Mortgage Co. breached their obligations to American Residential 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 poor performance of the loan pool hurt American Residential's reported earnings for 1999 and 2000, the company alleges.
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