The agreement provides that the Company and LBMC will arbitrate the claims held by American Residential Investment Trust, American Residential Eagle and American Residential Eagle Bond Trust 1998-1 against LBMC. It is alleged that LBMC breached its representations and warranties under the loans sold to the plaintiffs between December 1997 and March 1998.
The arbitration is scheduled to start in late February and is expected to take up to three weeks. If the arbitrator determines that any loans purchased violated LBMC's representations and warranties, LBMC will repurchase the loans pursuant to the terms of the agreements between the parties, or if the loans have already been disposed of through the foreclosure process, LBMC will reimburse the company for all interest and principal losses incurred.
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