A mortgage servicing company says it has settled a bitter, eight-year legal struggle with a wealthy Houston family that led to a libel trial over charges that the company was engaged in a massive fraud scheme.
In a motion filed in U.S. District Court in Dallas, Orix Capital Markets and the defendants asked Judge Jane J. Boyle to dismiss the libel suit, saying they have “fully and finally resolved all matters in controversy” between them.
If the motion is approved by Boyle as expected this week, it would vacate a jury verdict and a multimillion-dollar judgment in favor of Orix, which had sued the firm Super Future Equities, its founder, multimillionaire software mogul Schumann Rafizadeh, his son, Cyrus, and other relatives with ties to the company.
“We’re pleased to have been vindicated in this and we’re glad to put the episode behind us,” Orix senior counsel Greg May told msnbc.com Monday. The settlement was reached Friday afternoon just as the jury was about to deliver its verdict.
Orix and the Rafizadeh family had been locked in litigation that began in 2001 when the company foreclosed on one of the family’s real estate holdings in Louisiana. The feud escalated when Super Future Equities invested in a commercial mortgage trust serviced by Orix and sued the $1 billion financial services firm, alleging a host of misdeeds that it said were related to the nation’s mortgage meltdown.
That lawsuit, which Dallas-based Orix contended was retaliation for the family’s other legal issues with the company, was dismissed last year.
But a Web site that echoed the case rejected by the court remained online, spawning Orix’s libel countersuit.
In the verdict returned last week, the jury sided with Orix on virtually all of its claims, finding that all but one of the defendants had libeled and defamed Orix, and conspired to do so.
Cyrus Rafizadeh, a 20-year-old law student and onetime officer of Super Future Equities, had maintained before and during the trial that the Web site was his handiwork. Neither he nor defense attorney Tim Gavin responded to msnbc.com’s e-mailed requests for comment on the settlement.
Cyrus Rafizadeh's apology
However, in a statement published on the disputed Web site, Cyrus Rafizadeh wrote: “All statements on predatorix.com, and on YouTube under the ‘Predatorix’ heading, regarding ORIX have turned out to be incorrect, and are hereby withdrawn and disavowed for all purposes. I apologize for any damage I may have caused by my statements.”
Orix attorney May would not divulge specifics of the financial settlement between the parties. In a statement e-mailed to msnbc.com, he said: “As a result of the settlement, ORIX is now the owner of www.predatorix.com. We obtained a written apology that is now posted on the Web site. We achieved a favorable a settlement for the MLMI trust of the Houston bankruptcy proceeding that has been ongoing since 2005. And Schumann Rafizadeh has made a substantial donation to the ORIX Foundation in support of ORIX's nonprofit activities in our community.”