UPDATE: Goldman: Allstate, AIG, Others Threaten Mortgage Suits -Filing
August 09 2011 - 12:51PM
Dow Jones News
NEW YORK -- Goldman Sachs Group Inc. (GS) said Tuesday that
Allstate Corp. (ALL), John Hancock and American International Group
Inc. (AIG) are among the companies that have threatened to sue it
for claims related to mortgage-related offerings.
Others include Fannie Mae (FNMA), Freddie Mac (FMCC), the
National Credit Union Administration and the Federal Housing
Finance Agency, the investment bank said in a securities filing on
Tuesday.
Goldman has already been facing claims from companies and
investors that lost money from mortgage-related securities. It
lowered its loss estimate for those plaintiffs to $485 million as
of the end of June, from $514 million at the end of March. That
lower figure is included in Goldman's estimate of $2 billion in
"reasonably possible" losses beyond its reserves also disclosed in
the filing.
New lawsuits, such as those contemplated but not filed by
Allstate, AIG and the others, aren't accounted for in the $2
billion estimate, however.
Banks have continued to face litigation related to mortgage
products they sold in the last few years during the run up to the
financial crisis. On Monday AIG sued Bank of America Corp. (BAC),
seeking to recover more than $10 billion on investments in
mortgage-backed securities bought between 2005 and 2007.
In the filing Tuesday, Goldman said Allstate, AIG and the other
entities have threatened to assert claims against it, and it has
entered agreements with some of them to continue to negotiate.
Shares of Goldman, which lost 6% during Monday's market swoon,
recently traded up 0.95%, to $118.75.
-By Liz Moyer, Dow Jones Newswires; 212-416-2512;
liz.moyer@dowjones.com
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