Unprecedented government-led bailouts of cornerstone financial institutions serve as an indicator that the tidal wave of litigation over failed sub-prime mortgages has hardly even begun.


LaCroix “If sub-prime litigation is a nine-inning ball game, we’re only in the top of the second inning,” says Kevin LaCroix, an attorney and partner in management liability insurer OakBridge Insurance Services. Rescues for Fannie Mae, Freddie Mac, Lehman Brothers, and AIG, for example, will lead to a surge of new legal claims, says LaCroix.

According to Fritz Chockley, a partner with Baker Hostetler and coordinator of the firm’s litigation practice group, several hundred suits already ...