Citigroup Mortgage Settlement Approval Sought by Trustees

Trustees for mortgage bond investors asked a New York court to approve a $1.13 billion settlement reached in April with Citigroup Inc. (C) as the bank seeks to resolve liabilities for loans it packaged and sold in the run-up to the 2008 financial crisis.

U.S. Bank NA, Deutsche Bank National Trust Co., HSBC Bank USA NA and Law Debenture Trust Co. of New York filed a petition seeking approval of the accord in New York State Supreme Court inManhattan yesterday under a law that allows trustees to seek approval of their actions.

The settlement covers 68 securitization trusts that issued a combined $59.4 billion in mortgage-backed securities from 2005 to 2008, according to a statement issued by Citigroup in April. The pact was negotiated by the bank and a group of 19 institutional investors, represented by Gibbs & Bruns LLP, holding more than $5.3 billion of the unpaid principal balance of the securities, according to the petition.

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