On April 30, 2015, New York's highest court heard arguments in ACE Securities Corp. v. DB Structured Products Inc. regarding the accrual date for RMBS put-back claims – i.e., the date on which the statute of limitations begins to run. Plaintiff ACE appealed an intermediate appellate court's ruling that claims for breaches of representations and warranties are time-barred unless brought within six years of the transaction's closing date. ACE argued that the claim does not accrue, and the statute of limitations does not begin to run, until a demand for cure or repurchase has been made and rejected, contending that investors may not know of the alleged representation and warranty breaches within six years of closing. The defendant argued that if the Court adopted plaintiff's approach and ruled that a put-back claim does not accrue until demand is made, plaintiffs would be able to tactically take a "wait and see" attitude. Depending on how the deal performs, they potentially could wait for decades after a transaction was entered into before making a repurchase demand, and only then bring suit if the demand is rejected.
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