Regions

Dismissal of eminent domain case appealed to higher court

October 16
11:07 PM 2013

Mortgage loan bondholders that were threatened seized through eminent domain proceedings are seeking redress from a federal appeals court to revive their lawsuit against the city of Richmond in California. The trustees for such investors include BlackRock Inc, DoubleLine Capital LP and Pacific Investment Management Co.

The appeal is made against US District Judge Charles Breyer's order dismissing the case. One of the lawyers for the bank, Rocky Tsai, said in a filing made in federal court in San Francisco that the petition is to have the court appeal the ruling made.

Breyer based his ruling for the dismissal on the absence of any vote made by Richmond City council members whether to proceed to state court and file an eminent domain case to seize the loans. Breyer said the trustees' claims depend on the occurence of 'future events that may never occur.'

The bank trustees have filed suit alleging constitutional violatons in the Richmond plan to utilize eminent domain to seize over 600 loans where the amount owned is over and above the property value. The plan is to refinance these loans to provide the homeonwes built-in equity. 

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