IN RE FIRST ALLIANCE MORTG. CO.

Nos. 04-55396, 04-55920, 04-55942.

471 F.3d 977 (2006)

In re FIRST ALLIANCE MORTGAGE COMPANY, a California corporation, Debtor, Kenneth C. Henry, Liquidating Trust Trustee as Successor-in-Interest to the Official Joint Borrowers Committee, Plaintiff-Appellant, and Frank Aiello, Plaintiff, v. Lehman Commercial Paper, Inc., a New York corporation; Lehman Brothers, Inc., a Delaware corporation, Defendants-Appellees. In re First Alliance Mortgage Company, a California corporation, Debtor, Kenneth C. Henry, Liquidating Trust Trustee as Successor-in-Interest to the Official Joint Borrowers Committee; Frank Aiello; Nicolena Aiello; Michael Austin; Barbara Austin; Paul Carabetta; Lenore Carabetta; George Jerolemon; Josephine Jerolemon; Walter Berringer; Harriet Berringer, individually and on behalf of all others similarly situated; Official Joint Borrowers Committee, Plaintiffs-Appellees, v. Lehman Commercial Paper, Inc., a New York corporation; Lehman Brothers, Inc., a Delaware corporation, Defendants-Appellants. In re First Alliance Mortgage Company, a California corporation, Debtor, Michael Austin; Barbara Austin; George Jerolemon, Walter Berringer, Harriet Berringer; individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Lehman Commercial Paper, Inc., a New York corporation; Lehman Brothers, Inc., a Delaware corporation, Defendants-Appellees.

United States Court of Appeals, Ninth Circuit.

Filed December 8, 2006.


Attorney(s) appearing for the Case

Larry W. Gabriel (argued), Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., Los Angeles, CA, for the appellant.

Richard F. Scruggs (argued), Sidney A. Backstrom, The Scruggs Law Firm, P.A. Oxford, MS; Elizabeth J. Cabraser (argued), Hector D. Geribon, Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, CA; Kim E. Levy, Lili R. Sabo, Milberg Weiss Bershad & Schulman LLP, New York, NY, for the plaintiffs-appellees-cross-appellants.

Helen L. Duncan (argued), Robert W. Fischer, Jr., Joseph H. Park, Dinh Ha, Fulbright & Jaworski L.L.P., Los Angeles, CA; Marcy Hogan Greer, Fulbright & Jaworski L.L.P., Austin, TX, for the defendants-appellants-cross-appellees.

Before: HARRY PREGERSON, RICHARD R. CLIFTON, and JAY S. BYBEE, Circuit Judges.


CLIFTON, Circuit Judge:

First Alliance Mortgage Company was driven into bankruptcy and subsequent liquidation by well-publicized and justified allegations of fraudulent lending practices. The demise of First Alliance has led to two separate actions against Lehman Brothers, Inc. and its subsidiary Lehman Commercial Paper, Inc. (collectively referred to as "Lehman") growing out of Lehman's activity as a lender to First Alliance and as the underwriter of First Alliance...

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