Preview
FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017
NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
In the matter of the application of
WELLS FARGO BANK, NATIONAL ASSOCIATION,
U.S. BANK NATIONAL ASSOCIATION, THE BANK
Index No. 657387/2017
OF NEW YORK MELLON, THE BANK OF NEW YORK
MELLON TRUST COMPANY, N.A., WILMINGTON
Motion Sequence No. 005
TRUST, NATIONAL ASSOCIATION, HSBC BANK
USA, N.A., and DEUTSCHE BANK NATIONAL TRUST
COMPANY (as Trustees, Indenture Trustees, Securities
IAS Part 60
Administrators, Paying Agents, and/or Calculation Agents
Honorable Marcy S. Friedman
of Certain Residential Mortgage-Backed Securitization
Trusts),
Petitioners,
For Judicial Instructions under CPLR Article 77 on the
Administration and Distribution of a Settlement Payment.
AXONIC CAPITAL LLC'S MEMORANDUM OF LAW IN OPPOSITION
RESPONDENTS'
TO THE CHALLENGING JOINT MOTION TO LIMIT STANDING
TO CERTIFICATEHOLDERS IN THE SETTLEMENT TRUSTS
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TABLE OF CONTENTS
PRELIMINARY STATEMENT 1
....................................................................................................
STATEMENT OF 4
FACTS.............................................................................................................
ARGUMENT................................................................................................................................
15
INTERESTED"
I. AXONIC IS A "PERSON UNDER THE SCPA AND SHOULD BE
PERMITTED TO PARTICIPATE IN THIS ARTICLE 77 PROCEEDING................... 16
A. Under The SCPA Axonic Has A Right To Participate In This Proceeding .........
16
B. Should The Court Determine That Intervention Is The Appropriate Standard,
Axonic Meets That Standard As Well..................................................................
19
RESPONDENTS'
II. THE CHALLENGING ATTEMPT TO PREVENT AXONIC FROM
PARTICIPATING IN THE ARTICLE 77 PROCEEDING SHOULD BE REJECTED. . 20
Respondents'
A. The Challenging Effort To Expand The Definition Of Beneficiary
Beyond The SCPA Is Unavailing.........................................................................
20
Respondents'
B. The Challenging Standing Argument Is Inapplicable To
Participation In An Article 77 Proceeding By A re-REMIC 21
Trust.......................
C. The No-Action Clauses In The Governing Documents Are Irrelevant................
23
................
CONCLUSION. 25
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TABLE OF AUTHORITIES
Page(s)
Cases
Bank v. Allen,
58 Misc. 2d 150, 294 N.Y.S.2d 813 (N.Y. Sup. Ct. ......................................................22
1968)......................................................22
Calvary Hosp., Inc. v. Tweedy,
No. 18049/2005, 2007 WL 1953412 (N.Y. Sup. Ct. June 18, 2007).......................................22
Matter of Citibank, N.A.,
No. 1954-2656/B, 2016 WL 6922169 (N.Y. Sur. Ct. Nov. 21, 2016).....................................18
Elinor Homes Co. v. St.Lawrence,
113 A.D.2d 25 (2d Dep't 1985)...............................................................................................18
...............................................................................................18
In re Estate of Klein,
50 A.D.2d 891 (2d Dep't 1975)...............................................................................................20
...............................................................................................20
In re Estate of Maier,
178 Misc. 2d 1061, 682 N.Y.S.2d 831 (N.Y. Sur. Ct. 1998)...................................................18
In re Estate of Morse,
177 Misc. 2d 43, 676 N.Y.S.2d 407 (N.Y. Sur. Ct. 1998).......................................................17
In re Fin. Guar. Ins. Co.,
No. 401265/12, 2013 WL 3940289 (N.Y. Sup. Ct. July 31, 21
...................................17,
2013)...................................17,
In re Fin. Guar. Ins. Co.,
No. 401265/12, 2013 WL 4405157 (N.Y. Sup. Ct. Aug. 16, 2013)........................................18
........................................18
Grunewald v. Metro. Museum of Art,
125 A.D.3d 438 (1st Dep't ............................................................................................22
2015)............................................................................................22
Heer v. N. Moore St. Developers, L.L.C.,
140 A.D.3d 675 (1st Dep't 2016)............................................................................................20
............................................................................................20
In re Malasky,
290 A.D.2d 631 (3d Dep't 2002).............................................................................................18
.............................................................................................18
In re Mary XX,
52 A.D.3d 983 (3d Dep't 2008)...............................................................................................18
...............................................................................................18
N.Y. City Health & Hosps. Corp. v. City of N.Y.,
85 Misc. 2d 501, 380 N.Y.S.2d 891 (N.Y. Sup. Ct. 1976), aff'd, 391 N.Y.S.2d
83 (N.Y. Special Term 21
1981).............................................................................................16,
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Nat'l Credit Union Admin. Bd. v. U.S. Bank Nat's Assoc.,
14-cv-9928 (KBF), 2016 WL 796850 (S.D.N.Y. Feb. 25, 2016)............................................23
............................................23
One William St. Cap. Mgmt., LP. v. Edu. Loan Trust IV,
No. 652274/2012, 2015 WL 4501194 (N.Y. Sup. Ct. July 18, 2015).....................................18
.....................................18
In re Ricky P.,
135 Misc. 2d 28, 513 N.Y.S.2d 606 (N.Y. Fam. Ct. 1987).....................................................18
.....................................................18
Roberts v. Health & Hosps. Corp.,
87 A.D.3d 311 (1st Dep't ..............................................................................................22
2011)..............................................................................................22
Sanchez v. Blustein, Shapiro, Rich & Barone LLP,
No. 13-CV-8886 (CS), 2014 WL 7339193 (S.D.N.Y. Dec. 23, 2014)....................................23
Wells Fargo Bank Minn., N.A. v. Ray,
23 Misc. 3d 931, 880 N.Y.S.2d 454 (N.Y. Sup. Ct. 2009)......................................................20
......................................................20
Wells Fargo Bank, N.A. v. McLean,
70 A.D.3d 676 (2d Dep't 2009)...............................................................................................19
...............................................................................................19
Statutes
CPLR § 1012..................................................................................................................................19
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CPLR § 19
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1013............................................................................................................................18,
CPLR § 7701 .................................................................................................................................15
CPLR § 7703..................................................................................................................................16
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CPLR § 7802..................................................................................................................................18
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SCPA § 22
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
103..............................................................................................................................16,
SCPA § 1410..................................................................................................................................17
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Other Authorities
Restatement (Third) of Trusts $ 48 21
..........................................................................................20,
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Axonic Capital LLC, on behalf of its managed funds ("Axonic"), by itsattorneys Binder
& Schwartz LLP, respectfully submits this memorandum of law in opposition to the Joint
Motion to Limit Standing to Certificateholders in the Settlement Trusts, which was filed by a
group of Institutional Investors, AIG Parties, and various other funds (allidentified individually,
Respondents,"
and referred to collectively as the "Challenging in the Standing Motion) on March
12, 2018. See Consolidated Memorandum of Law in Support of Joint Motion to Limit Standing
Motion"
to Certificateholders in the Settlement Trusts, NYSCEF Doc. No. 251 (the "Standing Motion").
For the reasons set forth below, the Standing Motion should be denied as against Axonic.
PRELIMINARY STATEMENT
The Standing Motion is an attempt by the Challenging Respondents to prevent Axonic
from participating in this Article 77 proceeding with respect to four Settlement Trusts in which
interest.1
Axonic has a direct economic The proceeding was commenced by the Petitioners to
seek judicial guidance regarding the distribution of the Settlement Payment to the Settlement
challenges"
Trusts in order to avoid the "significant risk of to the administration and distribution
of the Settlement Payment after receipt of the settlement proceeds.
proceeding"
The Petitioners brought this "single Article 77 so that "Certificateholders
Payment"
and other interested parties-the direct economic beneficiaries of the Settlement
(emphasis added) could appear and be heard, resulting in a uniform, final judgment. Moreover,
this Court, in itsorder to show cause, directed responses from "Certificateholders and any other
Trusts"
person claiming an interest in any of these Settlement (emphasis added). Joinder and the
participation of interested parties in Article 77 proceedings are governed by the Surrogate's
1
Axonic also holds an interest in three additional Settlement Trusts, BSMF 2006-SL6; BSMF 2007-SL1;
and PRIME 2006-2, as a direct certificateholder and the Challenging Respondents do not challenge
Axonic's standing to participate in the Article 77 proceeding as to these three Settlement Trusts.
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Court Procedure Act (the "SCPA"), which defines such persons to include "[a]ny person entitled
estate."
or allegedly entitled to share as beneficiary in the Thus, any person who has, or alleges
to have, a pecuniary interest in an estate (which is also defined as a trust) is considered an
interested party under the SCPA and thus can participate in an Article 77 proceeding. Axonic
has direct and undivided interests in the four challenged Settlement Trusts based on its holdings
in pass-through re-REMIC Trusts. Unlike certain other financial structures where the cash flows
from various investments are pooled and then distributed, a re-REMIC Trust affords investors
(like Axonic) an undivided, absolute interest in a single specified class of certificates (and
distributions therefrom) issued by an underlying RMBS trust-here, the four Settlement Trusts at
issue.2
issue. Axonic's interests fitsquarely within the definition of an interested person who is
entitled to participate in this Article 77 proceeding.
Although participation in an Article 77 proceeding is governed by definitions under the
SCPA, Axonic also meets the standard for intervention under Sections 1012 and 1013 of the
N.Y. Civil Practice Law and Rules (the "CPLR"). Axonic's payment under the Settlement will
vary depending on the outcome of this Article 77 proceeding, which will bind Axonic, and
Axonic's interests are otherwise not represented.
The Challenging Respondents have no compelling response. First, the Challenging
"Beneficiary"
Respondents argue that the definition of in the Restatement (Third) of Trusts
"Beneficiary"
limits the definition of in the SCPA. However, there is no support for looking to
the Restatement (Third) of Trusts in this context. Moreover, the definition in the Restatement
beneficiaries,"
(Third) of Trusts includes "persons who have succeeded to interests of a
definition that encompasses Axonic's interest.
2
Because Axonic holds itsinterests exclusively through re-REMIC trusts,this Opposition does not
Respondents'
address the Challenging arguments with respect to CDOs or NIMS trusts.
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Second, the Challenging Respondents object to Axonic's participation on the basis of
general standing principles but the cases cited are either factually inapplicable because they
involve the interest of a creditor, not a beneficiary like Axonic, or because they involve a
different ownership vehicle that pools the interest of investors rather than segregating them like a
re-REMIC trust. The Challenging Respondents ignore that courts allow statutory schemes to
vary standing requirements when determining the scope of participation in special proceedings
and that the Surrogate Court has broadly construed who may participate in an Article 77
proceeding.
Third, the Challenging Respondents argue that a provision in the re-REMIC trust
agreements providing that only the trustee may bring suit bars Axonic's participation in this
proceeding. However, Axonic is not bringing a suit on behalf of the re-REMIC trusts and thus
the no-action provisions have no relevance in determining who is permitted to appear and
participate in an Article 77 proceeding. Indeed, the agreements governing the Settlement Trusts,
pursuant to which certificates were issued to the Challenging Respondents, contain similar
provisions specifying that only the trustee may sue on behalf of certificateholders. If
participation in the Article 77 were contingent on compliance with the no-action clauses of the
operative transactional documents, then the Challenging Respondents would be equally
precluded from participation.
Contrary to the broad scope of the Article 77 proceeding and without regard to the
particularities of the re-REMIC structure applicable to Axonic, the Challenging Respondents
seek to prevent this Court from hearing the position of Axonic, even though itwill be impacted
dollar for dollar based on the method of distribution ultimately chosen by the Court. The
Challenging Respondents are seeking to deprive Axonic and the other Challenged Respondents
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of their right to assert their position to this Court so the Challenging Respondents may argue
unopposed for a methodology that will advantage their economic interests over the interests of
Axonic and the other Challenged Respondents. Preventing the participation of a party with a
significant economic interest in a Settlement Trust goes against the purpose of this Article 77
proceeding, would deprive Axonic of due process, and is not supported by law. The Challenging
Respondents'
Standing Motion as to Axonic's interest in the four Settlement Trusts should be
denied.
STATEMENT OF FACTS
The Settlement Agreement
On November 15, 2013, as modified on July 29, 2014, Wells Fargo Bank, National
Association, U.S. Bank National Association, the Bank of New York Mellon Trust Company,
N.A., Wilmington Trust, National Association, HSBC Bank USA, N.A. and Deutsche Bank
National Trust Company, as trustees, indenture trustees, securities administrators, paying agents,
"Petitioners"
and/or calculation agents (the "Petitioners") of 270 residential mortgage-backed securitization
Trusts"
trusts (the "Settlement Trusts") reached a settlement agreement with JPMorgan Chase & Co and
its direct and indirect subsidiaries, and a group of institutional investors (the "Settlement
Agreement" ("Petition"
Agreement"). NYSCEF Doc. No. 1 ("Petition"), ¶ 1. The Settlement Agreement provided for
the payment of up to $4.5 billion that would be allocated among the Settlement Trusts. Id. The
allocable portion of the settlement payment would then be transferred to each Settlement Trust
Payment"
for distribution to itsbeneficiaries (the "Settlement Payment"). Id.
The Petitioners commenced a prior proceeding under Article 77 of the CLPR, wherein
the Court found that the trustees of the Settlement Trusts acted reasonably in accepting the
Settlement Agreement on behalf of the Settlement Trusts and approved the settlement. In re U.S.
Bank Nat'l Ass'n, et al.,NYSCEF Doc. No. 598, Index No. 652382/2014, Final Judgment and
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Order, at 3 (Aug. 23, 2016) (Friedman, J.). The Court further ruled that parties claiming rights in
any Settling Trusts were "barred from asserting claims against any Trustee with respect to any
Trustee's evaluation and acceptance of the Settlement Agreement and implementation of the
Settlement Agreement, so long as such implementation is in accordance with the terms of the
Agreement."
Settlement Id. at 3-4.
Implementation Of The Settlement Agreement
On December 15, 2017, having identified the potential for conflict regarding application
"waterfall"
of the Settlement Payment in accordance with the provisions in the governing
agreements for each of the Settlement Trusts, the Petitioners filed a second petition under CPLR
Article 77 to clarify how the Settlement Payment should be allocated and distributed. Petition
¶ 66.
Resolution of these issues about the Settlement Payment will impact which
certificateholders receive the Settlement Payment and the amount of the Settlement Payment that
the various classes of certificateholders will receive. Id. ¶ 67. The Petition recognizes that
"Certificateholders and other interested parties-the direct economic beneficiaries of the
Settlement Payment-may have competing views concerning how the issues should be resolved,
depending on the particular classes of certificates that they hold and how those classes may be
impacted."
Id. Thus, the Petitioners sought judicial intervention to resolve the "evident
uncertainty"
surrounding the distribution issues because of the potential for disagreement among
the direct economic beneficiaries of the Settlement Payment. Id. ¶ 69.
On December 19, 2017, the Court issued an order directing that "Certificate holders and
any other person claiming an interest in any of these Settlement Trusts (each, an 'Interested
Person,'
and all such persons collectively, 'Interested Persons') show cause . .. why an order and
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Petition...." ." ("
judgment should not be entered granting the Petition . .. NYSCEF Doc. No. 30 ("Order to
Cause"
Show Cause") at 2. Axonic submitted a timely response to the Petition on January 29, 2018,
setting forth itsposition regarding distribution of the Settlement Payment. NYSCEF Doc. Nos.
159-163.
On March 12, 2018, the Challenging Respondents filed the instant motion to preclude
Respondents"
certain beneficiaries of the Settlement Payment (the "Challenged Respondents") from
participating in this proceeding. The Challenging Respondents take the position in the Standing
"indirectly"
Motion that any beneficiaries who hold their interests in the Settlement Payment
through an investment in a CDO, a re-REMIC trust, or a NIMS trust lack standing to appear in
this proceeding. Standing Mot. at 6-7.
Axonic's Interest In The Four Settlement Trusts
Axonic is one of several parties whose standing to participate in this proceeding has been
challenged. Axonic is a Challenged Respondent subject to the Standing Motion through the
interest itholds in four Settlement Trusts through re-REMIC trusts. As a certificateholder in five
re-REMIC trusts, Axonic is a direct economic beneficiary of the portion of the Settlement
Payment allocable to four of the Settlement Trusts.
A re-REMIC trust is a pass-through entity that owns tranches (or classes) of existing
mortgage-backed residential securities for the benefit of certificateholders in the re-REMIC trust.
Affidavit"
Affidavit of Jamshed Engineer, dated April 11, 2018 (the "Engineer Affidavit") ¶ 4. Although
re-REMIC trusts typically own certificates issued by multiple underlying RMBS REMIC trusts,
the structure of the re-REMIC trust is designed to segregate the interests of the re-REMIC
investors based upon the specific underlying RMBS REMIC trust that issued the certificates in
which the re-REMIC investor holds an interest. Engineer Aff. ¶ 5. Thus, the certificateholders
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of the re-REMIC do not pool all of the assets that flow into the re-REMIC trust. Id. ¶ 6. Rather,
investors'
specific interests are siloed and flow directly from specific underlying RMBS REMIC
trusts. Id. That is,the re-REMIC investor is only entitled to distributions based on the amounts
received by the re-REMIC trust from certain classes of RMBS certificates issued by the specific
underlying RMBS REMIC trust. Id. ¶ 7. What this means for Axonic is that its interest in the
re-REMIC trust flows directly from the payments made by the Settlement Trust.
Set forth below is a description of the specific nature of Axonic's interests in the four
Settlement Trusts that are being challenged bythe Standing Motion.
In accordance with the DMARC 2014-RS1 re-REMIC Trust Agreement, the original
Certificates"
holders of the underlying RMBS REMIC certificates (the "Underlying Certificates")
assign[ed]"
"transfer[ed], convey[ed], [sold] and to the Trust "all the right, title and interest . ..
."
in and to the Deposited Underlying Certificates, including alldistributions thereon payable . ..
Id. § 2.01. The re-REMIC Trustee, in turn, "holds and will hold the Deposited Underlying
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Certificateholders"
Securities in trust for the benefit of allpresent and future [re-REMIC] of
which Axonic is one. Id. § 2.02 (emphasis added).
The DMARC 2014-RS1 re-REMIC Trust then issued different groups of certificates,
with each group backed by an interest in a single underlying RMBS REMIC trust. See, e.g.,
Binder Aff. Ex. A (DMARC 2014-RS1 re-REMIC Trust Agreement § 1.01) (defining the
interests of the four Groups).
The other Groups in the DMARC 2014-
RS1 re-REMIC have interests in RMBS REMIC trusts that are not Settlement Trusts. Id. Thus,
while certain investors in the DMARC 2014-RS1 re-REMIC Trust may not have a direct interest
in a Settlement Trust, Axonic, as an owner of , certainly does.
below:3
A chart illustrating the structure of the DMARC 2014-RS1 re-REMIC Trust is below:
3
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More specifically, in accordance with the CMLTI 2008-AR4 re-REMIC Trust
Agreement, the original holder of certificates issued by th
assign[ed]"
Settlement Trusts "transfer[ed], convey[ed], [sold] and to the Trustee of the CMLTI
2008-AR4 re-REMIC Trust "all the right, titleand interest . .. inand to the Underlying
Certificates, including all distributions thereon payable . . . withappropriate endorsements and
other documentation sufficient under the Underlying Agreements to transfer the Underlying
Trustee...." ."
Certificated to the Trustee .. . See Binder Aff. Ex. C (CMLTI 2008-AR4 Trust Agreement
§ 2.01); id. Ex. D (CMLTI 2008-AR4 Private Placement Memorandum, Preliminary Statement).
Thus, as of the closing date of the re-REMIC Trust, the owners of the Underlying Certificates in
the RMBS REMIC trusts (the depositor) "has transferred all right, title and interest in the
Trustee."
Underlying Certificates to the [re-REMIC] Binder Aff. Ex. C (CMLTI 2008-AR4
Trust Agreement § 2.04). The re-REMIC Trustee, in turn, "holds and will hold the Underlying
1
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Certificates... in trust for the exclusive use and benefit of all present and future [re-REMIC]
Certificateholders"
which includes Axonic. Jd. $ 2.02 (emphasis added).
The CMLTI 2008-AR4 re-REMIC Trust specifies that the re-REMIC investor is only
entitled to the amounts received by the re-REMIC from the specific underlying RMBS REMIC
trust and that when funds are distributed by the re-REMIC Trust, only certificateholders in the
particular Group receive a distribution. Id. ($ 3.02(a)-3.03 (describing how the money in each
Group's account is distributed).
A chart illustrating the structure of the
CMLTI 2008-AR4 re-REMIC Trust is below:
4
11
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Similar to the re-REMIC Trusts described above, a specific group of certificates were
then issued by the re-REMIC Trusts, which were backed by the certificates in the
Settlement rust owned each re-REMIC rust. See Binder Aff.. Ex. G (NMRR 2015-
by
10R re-REMIC Trust Agreement, Ex. B-1); id. Ex. H (NMRR 2015-11R re-REMIC Trust
Agreement, Ex. B-1).
As with the other re-REMIC the NMRR 2015-10R and NMRR 2015-11R re-
trusts,
REMIC Trusts then issued a specific group of certificates (among other groups of certificates
they issued backed by other RMBS REMICs) that are backed by the
Settlement Trust certificates. See Binder Aff. Ex. 6 (NMRR 2015-10R re-REMIC Trust
Agreement, Ex. B-1); id. Ex. H (NMRR 2015-11R re-REMIC Trust Agreement, Ex. B-1).
~
Preview
FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK In the matter of the application of WELLS FARGO BANK, NATIONAL ASSOCIATION, U.S. BANK NATIONAL ASSOCIATION, THE BANK Index No. 657387/2017 OF NEW YORK MELLON, THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., WILMINGTON Motion Sequence No. 005 TRUST, NATIONAL ASSOCIATION, HSBC BANK USA, N.A., and DEUTSCHE BANK NATIONAL TRUST COMPANY (as Trustees, Indenture Trustees, Securities IAS Part 60 Administrators, Paying Agents, and/or Calculation Agents Honorable Marcy S. Friedman of Certain Residential Mortgage-Backed Securitization Trusts), Petitioners, For Judicial Instructions under CPLR Article 77 on the Administration and Distribution of a Settlement Payment. AXONIC CAPITAL LLC'S MEMORANDUM OF LAW IN OPPOSITION RESPONDENTS' TO THE CHALLENGING JOINT MOTION TO LIMIT STANDING TO CERTIFICATEHOLDERS IN THE SETTLEMENT TRUSTS 1 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 TABLE OF CONTENTS PRELIMINARY STATEMENT 1 .................................................................................................... STATEMENT OF 4 FACTS............................................................................................................. ARGUMENT................................................................................................................................ 15 INTERESTED" I. AXONIC IS A "PERSON UNDER THE SCPA AND SHOULD BE PERMITTED TO PARTICIPATE IN THIS ARTICLE 77 PROCEEDING................... 16 A. Under The SCPA Axonic Has A Right To Participate In This Proceeding ......... 16 B. Should The Court Determine That Intervention Is The Appropriate Standard, Axonic Meets That Standard As Well.................................................................. 19 RESPONDENTS' II. THE CHALLENGING ATTEMPT TO PREVENT AXONIC FROM PARTICIPATING IN THE ARTICLE 77 PROCEEDING SHOULD BE REJECTED. . 20 Respondents' A. The Challenging Effort To Expand The Definition Of Beneficiary Beyond The SCPA Is Unavailing......................................................................... 20 Respondents' B. The Challenging Standing Argument Is Inapplicable To Participation In An Article 77 Proceeding By A re-REMIC 21 Trust....................... C. The No-Action Clauses In The Governing Documents Are Irrelevant................ 23 ................ CONCLUSION. 25 2 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 TABLE OF AUTHORITIES Page(s) Cases Bank v. Allen, 58 Misc. 2d 150, 294 N.Y.S.2d 813 (N.Y. Sup. Ct. ......................................................22 1968)......................................................22 Calvary Hosp., Inc. v. Tweedy, No. 18049/2005, 2007 WL 1953412 (N.Y. Sup. Ct. June 18, 2007).......................................22 Matter of Citibank, N.A., No. 1954-2656/B, 2016 WL 6922169 (N.Y. Sur. Ct. Nov. 21, 2016).....................................18 Elinor Homes Co. v. St.Lawrence, 113 A.D.2d 25 (2d Dep't 1985)...............................................................................................18 ...............................................................................................18 In re Estate of Klein, 50 A.D.2d 891 (2d Dep't 1975)...............................................................................................20 ...............................................................................................20 In re Estate of Maier, 178 Misc. 2d 1061, 682 N.Y.S.2d 831 (N.Y. Sur. Ct. 1998)...................................................18 In re Estate of Morse, 177 Misc. 2d 43, 676 N.Y.S.2d 407 (N.Y. Sur. Ct. 1998).......................................................17 In re Fin. Guar. Ins. Co., No. 401265/12, 2013 WL 3940289 (N.Y. Sup. Ct. July 31, 21 ...................................17, 2013)...................................17, In re Fin. Guar. Ins. Co., No. 401265/12, 2013 WL 4405157 (N.Y. Sup. Ct. Aug. 16, 2013)........................................18 ........................................18 Grunewald v. Metro. Museum of Art, 125 A.D.3d 438 (1st Dep't ............................................................................................22 2015)............................................................................................22 Heer v. N. Moore St. Developers, L.L.C., 140 A.D.3d 675 (1st Dep't 2016)............................................................................................20 ............................................................................................20 In re Malasky, 290 A.D.2d 631 (3d Dep't 2002).............................................................................................18 .............................................................................................18 In re Mary XX, 52 A.D.3d 983 (3d Dep't 2008)...............................................................................................18 ...............................................................................................18 N.Y. City Health & Hosps. Corp. v. City of N.Y., 85 Misc. 2d 501, 380 N.Y.S.2d 891 (N.Y. Sup. Ct. 1976), aff'd, 391 N.Y.S.2d 83 (N.Y. Special Term 21 1981).............................................................................................16, 3 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Nat'l Credit Union Admin. Bd. v. U.S. Bank Nat's Assoc., 14-cv-9928 (KBF), 2016 WL 796850 (S.D.N.Y. Feb. 25, 2016)............................................23 ............................................23 One William St. Cap. Mgmt., LP. v. Edu. Loan Trust IV, No. 652274/2012, 2015 WL 4501194 (N.Y. Sup. Ct. July 18, 2015).....................................18 .....................................18 In re Ricky P., 135 Misc. 2d 28, 513 N.Y.S.2d 606 (N.Y. Fam. Ct. 1987).....................................................18 .....................................................18 Roberts v. Health & Hosps. Corp., 87 A.D.3d 311 (1st Dep't ..............................................................................................22 2011)..............................................................................................22 Sanchez v. Blustein, Shapiro, Rich & Barone LLP, No. 13-CV-8886 (CS), 2014 WL 7339193 (S.D.N.Y. Dec. 23, 2014)....................................23 Wells Fargo Bank Minn., N.A. v. Ray, 23 Misc. 3d 931, 880 N.Y.S.2d 454 (N.Y. Sup. Ct. 2009)......................................................20 ......................................................20 Wells Fargo Bank, N.A. v. McLean, 70 A.D.3d 676 (2d Dep't 2009)...............................................................................................19 ...............................................................................................19 Statutes CPLR § 1012..................................................................................................................................19 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ CPLR § 19 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1013............................................................................................................................18, CPLR § 7701 .................................................................................................................................15 CPLR § 7703..................................................................................................................................16 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ CPLR § 7802..................................................................................................................................18 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SCPA § 22 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 103..............................................................................................................................16, SCPA § 1410..................................................................................................................................17 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Other Authorities Restatement (Third) of Trusts $ 48 21 ..........................................................................................20, 4 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Axonic Capital LLC, on behalf of its managed funds ("Axonic"), by itsattorneys Binder & Schwartz LLP, respectfully submits this memorandum of law in opposition to the Joint Motion to Limit Standing to Certificateholders in the Settlement Trusts, which was filed by a group of Institutional Investors, AIG Parties, and various other funds (allidentified individually, Respondents," and referred to collectively as the "Challenging in the Standing Motion) on March 12, 2018. See Consolidated Memorandum of Law in Support of Joint Motion to Limit Standing Motion" to Certificateholders in the Settlement Trusts, NYSCEF Doc. No. 251 (the "Standing Motion"). For the reasons set forth below, the Standing Motion should be denied as against Axonic. PRELIMINARY STATEMENT The Standing Motion is an attempt by the Challenging Respondents to prevent Axonic from participating in this Article 77 proceeding with respect to four Settlement Trusts in which interest.1 Axonic has a direct economic The proceeding was commenced by the Petitioners to seek judicial guidance regarding the distribution of the Settlement Payment to the Settlement challenges" Trusts in order to avoid the "significant risk of to the administration and distribution of the Settlement Payment after receipt of the settlement proceeds. proceeding" The Petitioners brought this "single Article 77 so that "Certificateholders Payment" and other interested parties-the direct economic beneficiaries of the Settlement (emphasis added) could appear and be heard, resulting in a uniform, final judgment. Moreover, this Court, in itsorder to show cause, directed responses from "Certificateholders and any other Trusts" person claiming an interest in any of these Settlement (emphasis added). Joinder and the participation of interested parties in Article 77 proceedings are governed by the Surrogate's 1 Axonic also holds an interest in three additional Settlement Trusts, BSMF 2006-SL6; BSMF 2007-SL1; and PRIME 2006-2, as a direct certificateholder and the Challenging Respondents do not challenge Axonic's standing to participate in the Article 77 proceeding as to these three Settlement Trusts. 5 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Court Procedure Act (the "SCPA"), which defines such persons to include "[a]ny person entitled estate." or allegedly entitled to share as beneficiary in the Thus, any person who has, or alleges to have, a pecuniary interest in an estate (which is also defined as a trust) is considered an interested party under the SCPA and thus can participate in an Article 77 proceeding. Axonic has direct and undivided interests in the four challenged Settlement Trusts based on its holdings in pass-through re-REMIC Trusts. Unlike certain other financial structures where the cash flows from various investments are pooled and then distributed, a re-REMIC Trust affords investors (like Axonic) an undivided, absolute interest in a single specified class of certificates (and distributions therefrom) issued by an underlying RMBS trust-here, the four Settlement Trusts at issue.2 issue. Axonic's interests fitsquarely within the definition of an interested person who is entitled to participate in this Article 77 proceeding. Although participation in an Article 77 proceeding is governed by definitions under the SCPA, Axonic also meets the standard for intervention under Sections 1012 and 1013 of the N.Y. Civil Practice Law and Rules (the "CPLR"). Axonic's payment under the Settlement will vary depending on the outcome of this Article 77 proceeding, which will bind Axonic, and Axonic's interests are otherwise not represented. The Challenging Respondents have no compelling response. First, the Challenging "Beneficiary" Respondents argue that the definition of in the Restatement (Third) of Trusts "Beneficiary" limits the definition of in the SCPA. However, there is no support for looking to the Restatement (Third) of Trusts in this context. Moreover, the definition in the Restatement beneficiaries," (Third) of Trusts includes "persons who have succeeded to interests of a definition that encompasses Axonic's interest. 2 Because Axonic holds itsinterests exclusively through re-REMIC trusts,this Opposition does not Respondents' address the Challenging arguments with respect to CDOs or NIMS trusts. 6 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Second, the Challenging Respondents object to Axonic's participation on the basis of general standing principles but the cases cited are either factually inapplicable because they involve the interest of a creditor, not a beneficiary like Axonic, or because they involve a different ownership vehicle that pools the interest of investors rather than segregating them like a re-REMIC trust. The Challenging Respondents ignore that courts allow statutory schemes to vary standing requirements when determining the scope of participation in special proceedings and that the Surrogate Court has broadly construed who may participate in an Article 77 proceeding. Third, the Challenging Respondents argue that a provision in the re-REMIC trust agreements providing that only the trustee may bring suit bars Axonic's participation in this proceeding. However, Axonic is not bringing a suit on behalf of the re-REMIC trusts and thus the no-action provisions have no relevance in determining who is permitted to appear and participate in an Article 77 proceeding. Indeed, the agreements governing the Settlement Trusts, pursuant to which certificates were issued to the Challenging Respondents, contain similar provisions specifying that only the trustee may sue on behalf of certificateholders. If participation in the Article 77 were contingent on compliance with the no-action clauses of the operative transactional documents, then the Challenging Respondents would be equally precluded from participation. Contrary to the broad scope of the Article 77 proceeding and without regard to the particularities of the re-REMIC structure applicable to Axonic, the Challenging Respondents seek to prevent this Court from hearing the position of Axonic, even though itwill be impacted dollar for dollar based on the method of distribution ultimately chosen by the Court. The Challenging Respondents are seeking to deprive Axonic and the other Challenged Respondents 7 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 of their right to assert their position to this Court so the Challenging Respondents may argue unopposed for a methodology that will advantage their economic interests over the interests of Axonic and the other Challenged Respondents. Preventing the participation of a party with a significant economic interest in a Settlement Trust goes against the purpose of this Article 77 proceeding, would deprive Axonic of due process, and is not supported by law. The Challenging Respondents' Standing Motion as to Axonic's interest in the four Settlement Trusts should be denied. STATEMENT OF FACTS The Settlement Agreement On November 15, 2013, as modified on July 29, 2014, Wells Fargo Bank, National Association, U.S. Bank National Association, the Bank of New York Mellon Trust Company, N.A., Wilmington Trust, National Association, HSBC Bank USA, N.A. and Deutsche Bank National Trust Company, as trustees, indenture trustees, securities administrators, paying agents, "Petitioners" and/or calculation agents (the "Petitioners") of 270 residential mortgage-backed securitization Trusts" trusts (the "Settlement Trusts") reached a settlement agreement with JPMorgan Chase & Co and its direct and indirect subsidiaries, and a group of institutional investors (the "Settlement Agreement" ("Petition" Agreement"). NYSCEF Doc. No. 1 ("Petition"), ¶ 1. The Settlement Agreement provided for the payment of up to $4.5 billion that would be allocated among the Settlement Trusts. Id. The allocable portion of the settlement payment would then be transferred to each Settlement Trust Payment" for distribution to itsbeneficiaries (the "Settlement Payment"). Id. The Petitioners commenced a prior proceeding under Article 77 of the CLPR, wherein the Court found that the trustees of the Settlement Trusts acted reasonably in accepting the Settlement Agreement on behalf of the Settlement Trusts and approved the settlement. In re U.S. Bank Nat'l Ass'n, et al.,NYSCEF Doc. No. 598, Index No. 652382/2014, Final Judgment and 8 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Order, at 3 (Aug. 23, 2016) (Friedman, J.). The Court further ruled that parties claiming rights in any Settling Trusts were "barred from asserting claims against any Trustee with respect to any Trustee's evaluation and acceptance of the Settlement Agreement and implementation of the Settlement Agreement, so long as such implementation is in accordance with the terms of the Agreement." Settlement Id. at 3-4. Implementation Of The Settlement Agreement On December 15, 2017, having identified the potential for conflict regarding application "waterfall" of the Settlement Payment in accordance with the provisions in the governing agreements for each of the Settlement Trusts, the Petitioners filed a second petition under CPLR Article 77 to clarify how the Settlement Payment should be allocated and distributed. Petition ¶ 66. Resolution of these issues about the Settlement Payment will impact which certificateholders receive the Settlement Payment and the amount of the Settlement Payment that the various classes of certificateholders will receive. Id. ¶ 67. The Petition recognizes that "Certificateholders and other interested parties-the direct economic beneficiaries of the Settlement Payment-may have competing views concerning how the issues should be resolved, depending on the particular classes of certificates that they hold and how those classes may be impacted." Id. Thus, the Petitioners sought judicial intervention to resolve the "evident uncertainty" surrounding the distribution issues because of the potential for disagreement among the direct economic beneficiaries of the Settlement Payment. Id. ¶ 69. On December 19, 2017, the Court issued an order directing that "Certificate holders and any other person claiming an interest in any of these Settlement Trusts (each, an 'Interested Person,' and all such persons collectively, 'Interested Persons') show cause . .. why an order and 9 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Petition...." ." (" judgment should not be entered granting the Petition . .. NYSCEF Doc. No. 30 ("Order to Cause" Show Cause") at 2. Axonic submitted a timely response to the Petition on January 29, 2018, setting forth itsposition regarding distribution of the Settlement Payment. NYSCEF Doc. Nos. 159-163. On March 12, 2018, the Challenging Respondents filed the instant motion to preclude Respondents" certain beneficiaries of the Settlement Payment (the "Challenged Respondents") from participating in this proceeding. The Challenging Respondents take the position in the Standing "indirectly" Motion that any beneficiaries who hold their interests in the Settlement Payment through an investment in a CDO, a re-REMIC trust, or a NIMS trust lack standing to appear in this proceeding. Standing Mot. at 6-7. Axonic's Interest In The Four Settlement Trusts Axonic is one of several parties whose standing to participate in this proceeding has been challenged. Axonic is a Challenged Respondent subject to the Standing Motion through the interest itholds in four Settlement Trusts through re-REMIC trusts. As a certificateholder in five re-REMIC trusts, Axonic is a direct economic beneficiary of the portion of the Settlement Payment allocable to four of the Settlement Trusts. A re-REMIC trust is a pass-through entity that owns tranches (or classes) of existing mortgage-backed residential securities for the benefit of certificateholders in the re-REMIC trust. Affidavit" Affidavit of Jamshed Engineer, dated April 11, 2018 (the "Engineer Affidavit") ¶ 4. Although re-REMIC trusts typically own certificates issued by multiple underlying RMBS REMIC trusts, the structure of the re-REMIC trust is designed to segregate the interests of the re-REMIC investors based upon the specific underlying RMBS REMIC trust that issued the certificates in which the re-REMIC investor holds an interest. Engineer Aff. ¶ 5. Thus, the certificateholders 10 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 of the re-REMIC do not pool all of the assets that flow into the re-REMIC trust. Id. ¶ 6. Rather, investors' specific interests are siloed and flow directly from specific underlying RMBS REMIC trusts. Id. That is,the re-REMIC investor is only entitled to distributions based on the amounts received by the re-REMIC trust from certain classes of RMBS certificates issued by the specific underlying RMBS REMIC trust. Id. ¶ 7. What this means for Axonic is that its interest in the re-REMIC trust flows directly from the payments made by the Settlement Trust. Set forth below is a description of the specific nature of Axonic's interests in the four Settlement Trusts that are being challenged bythe Standing Motion. In accordance with the DMARC 2014-RS1 re-REMIC Trust Agreement, the original Certificates" holders of the underlying RMBS REMIC certificates (the "Underlying Certificates") assign[ed]" "transfer[ed], convey[ed], [sold] and to the Trust "all the right, title and interest . .. ." in and to the Deposited Underlying Certificates, including alldistributions thereon payable . .. Id. § 2.01. The re-REMIC Trustee, in turn, "holds and will hold the Deposited Underlying 11 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Certificateholders" Securities in trust for the benefit of allpresent and future [re-REMIC] of which Axonic is one. Id. § 2.02 (emphasis added). The DMARC 2014-RS1 re-REMIC Trust then issued different groups of certificates, with each group backed by an interest in a single underlying RMBS REMIC trust. See, e.g., Binder Aff. Ex. A (DMARC 2014-RS1 re-REMIC Trust Agreement § 1.01) (defining the interests of the four Groups). The other Groups in the DMARC 2014- RS1 re-REMIC have interests in RMBS REMIC trusts that are not Settlement Trusts. Id. Thus, while certain investors in the DMARC 2014-RS1 re-REMIC Trust may not have a direct interest in a Settlement Trust, Axonic, as an owner of , certainly does. below:3 A chart illustrating the structure of the DMARC 2014-RS1 re-REMIC Trust is below: 3 12 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 13 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 More specifically, in accordance with the CMLTI 2008-AR4 re-REMIC Trust Agreement, the original holder of certificates issued by th assign[ed]" Settlement Trusts "transfer[ed], convey[ed], [sold] and to the Trustee of the CMLTI 2008-AR4 re-REMIC Trust "all the right, titleand interest . .. inand to the Underlying Certificates, including all distributions thereon payable . . . withappropriate endorsements and other documentation sufficient under the Underlying Agreements to transfer the Underlying Trustee...." ." Certificated to the Trustee .. . See Binder Aff. Ex. C (CMLTI 2008-AR4 Trust Agreement § 2.01); id. Ex. D (CMLTI 2008-AR4 Private Placement Memorandum, Preliminary Statement). Thus, as of the closing date of the re-REMIC Trust, the owners of the Underlying Certificates in the RMBS REMIC trusts (the depositor) "has transferred all right, title and interest in the Trustee." Underlying Certificates to the [re-REMIC] Binder Aff. Ex. C (CMLTI 2008-AR4 Trust Agreement § 2.04). The re-REMIC Trustee, in turn, "holds and will hold the Underlying 1 14 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Certificates... in trust for the exclusive use and benefit of all present and future [re-REMIC] Certificateholders" which includes Axonic. Jd. $ 2.02 (emphasis added). The CMLTI 2008-AR4 re-REMIC Trust specifies that the re-REMIC investor is only entitled to the amounts received by the re-REMIC from the specific underlying RMBS REMIC trust and that when funds are distributed by the re-REMIC Trust, only certificateholders in the particular Group receive a distribution. Id. ($ 3.02(a)-3.03 (describing how the money in each Group's account is distributed). A chart illustrating the structure of the CMLTI 2008-AR4 re-REMIC Trust is below: 4 11 15 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 16 of 29 FILED: NEW YORK COUNTY CLERK 04/12/2018 10:28 PM INDEX NO. 657387/2017 NYSCEF DOC. NO. 330 RECEIVED NYSCEF: 04/12/2018 Similar to the re-REMIC Trusts described above, a specific group of certificates were then issued by the re-REMIC Trusts, which were backed by the certificates in the Settlement rust owned each re-REMIC rust. See Binder Aff.. Ex. G (NMRR 2015- by 10R re-REMIC Trust Agreement, Ex. B-1); id. Ex. H (NMRR 2015-11R re-REMIC Trust Agreement, Ex. B-1). As with the other re-REMIC the NMRR 2015-10R and NMRR 2015-11R re- trusts, REMIC Trusts then issued a specific group of certificates (among other groups of certificates they issued backed by other RMBS REMICs) that are backed by the Settlement Trust certificates. See Binder Aff. Ex. 6 (NMRR 2015-10R re-REMIC Trust Agreement, Ex. B-1); id. Ex. H (NMRR 2015-11R re-REMIC Trust Agreement, Ex. B-1). ~