10-D 1 comm16dc2_10d_83.htm Form 10-D


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 10-D

ASSET-BACKED ISSUER
DISTRIBUTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the monthly distribution period from:
January 13, 2023 to February 10, 2023

Commission File Number of issuing entity: 333-206705-02
Central Index Key Number of issuing entity: 0001663244

COMM 2016-DC2 Mortgage Trust
(Exact name of issuing entity as specified in its charter)

Commission File Number of depositor: 333-193376
Central Index Key Number of depositor: 0001013454

Deutsche Mortgage & Asset Receiving Corporation
(Exact name of depositor as specified in its charter)

Central Index Key Number of sponsor (if applicable): 0001541294
German American Capital Corporation
(Exact name of sponsor as specified in its charter)

Central Index Key Number of sponsor (if applicable): 0001089877
KeyBank National Association
(Exact name of sponsor as specified in its charter)

Central Index Key Number of sponsor (if applicable): 0001555524
 LoanCore Capital Markets LLC (formerly known as Jefferies
LoanCore LLC)
(Exact name of sponsor as specified in its charter)

Lainie Kaye (212) 250-2500
(Name and telephone number, including area code, of the person to
contact in connection with this filing)

New York
(State or other jurisdiction of incorporation or organization
of the issuing entity)

Lower Tier Remic  81-1634426
Upper Tier Remic  81-1758688
Grantor Trust  81-6375604
(I.R.S. Employer Identification No.)

c/o Deutsche Bank Trust Company Americas as Certificate Administrator
1761 East St. Andrew Place, Santa Ana CA
(Address of principal executive offices of the issuing entity)

92705
(Zip Code)

(212) 250-2500
(Telephone number, including area code)

NONE
(Former name, former address, if changed since last report)

Registered / reporting pursuant to (check one)
Title of Class  Section 12(b)  Section 12(g)  Section 15(d)  Name of Exchange
(if Section 12(b))
Class A-1           [ ]             [ ]             [X]        Not Applicable
Class A-2           [ ]             [ ]             [X]        Not Applicable
Class A-3           [ ]             [ ]             [X]        Not Applicable
Class A-SB          [ ]             [ ]             [X]        Not Applicable
Class A-4           [ ]             [ ]             [X]        Not Applicable
Class A-5           [ ]             [ ]             [X]        Not Applicable
Class X-A           [ ]             [ ]             [X]        Not Applicable
Class A-M           [ ]             [ ]             [X]        Not Applicable
Class B             [ ]             [ ]             [X]        Not Applicable
Class C             [ ]             [ ]             [X]        Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes _X_   No ____


Part I - DISTRIBUTION INFORMATION

Item 1.  Distribution and Pool Performance Information.
On  February 10, 2023 a distribution was made to holders of the
certificates issued by COMM 2016-DC2 Mortgage Trust.  The
distribution report is attached as Exhibit 99.1 to this Form 10-D.

During the distribution period from January 13, 2023 to February 10, 2023
no assets securitized by Deutsche Mortgage & Asset Receiving
Corporation (the "Depositor") and held by COMM 2016-DC2 Mortgage
Trust were the subject of a demand to repurchase or replace for breach
of the representations and warranties contained in the underlying
transaction documents.

The Depositor filed a Form ABS-15G pursuant to Rule 15Ga-1 under the
Securities Exchange Act of 1934 on February 14, 2023.  The CIK number
of the Depositor is 0001013454.

German American Capital Corporation ("GACC"), one of the sponsors and
mortgage loan sellers, filed a Form ABS-15G pursuant to Rule 15Ga-1
under the Securities Exchange Act of 1934 on February 14, 2023.  The
CIK number of GACC is 0001541294.

KeyBank National Association ("KeyBank"), one of the sponsors
and mortgage loan sellers, filed a Form ABS-15G pursuant
to Rule 15Ga-1 under the Securities Exchange Act of 1934 on
February 02, 2023.  The CIK number of KeyBank is 0001089877.

LoanCore Capital Markets LLC (formerly known as Jefferies LoanCore LLC)
("LoanCore"), one of the sponsors and mortgage loan sellers, filed
a Form ABS-15G pursuant to  Rule 15Ga-1
under the Securities Exchange Act of 1934 on February 10, 2023.
The CIK number for LoanCore is 0001555524.


Part II - OTHER INFORMATION

Item 2. Legal Proceedings.

Disclosure from CWCapital Asset Management LLC, as special servicer:

From time to time, CWCapital Asset Management LLC, a Delaware limited liability
company ("CWCAM"), is a party to lawsuits and other legal proceedings as part of its
duties as a special servicer (e.g., enforcement of loan obligations) and/or arising
in the ordinary course of business. Other than as set forth in the following paragraphs,
there are currently no legal proceedings pending, and no legal proceedings known to
be contemplated by governmental authorities, against CWCAM or of which any of its
property is the subject, that are material to the certificateholders.

On December 17, 2015, U.S. Bank National Association, the trustee under five pooling
and servicing agreements for (i) Wachovia Bank Commercial Mortgage Trust 2007-C30, (ii)
COBALT CMBS Commercial Trust 2007-C2, (iii) Wachovia Bank Commercial Mortgage Trust
2007-C31, (iv) ML-CFC Commercial Mortgage Trust 2007-5 and (v) ML-CFC Commercial Mortgage
Trust 2007-6 commenced a proceeding with the Second Judicial District Court of Ramsey
County, Minnesota (the "State Court") for a declaratory judgment as to the proper
allocation of certain proceeds ("Disputed Proceeds") received by CWCAM in connection
with the sale of the Peter Cooper Village and Stuyvesant Town property in New York, New
York securing loans held by those trusts.  CWCAM was the special servicer of such property.
The petition requests the State Court to instruct the trustee, the trust beneficiaries,
and any other interested parties as to the amount of the Disputed Proceeds, if any, that
constitute penalty interest and/or the amount of the Disputed Proceeds, if any, that
constitute gain-on-sale proceeds, with respect to each trust.  On February 24, 2016, CWCAM
made a limited appearance with the State Court to file a motion to dismiss this proceeding
based on lack of jurisdiction, mootness, standing and forum non conveniens.  On
July 19, 2016, the State Court denied CWCAM's motion to dismiss.  On July 22, 2016, the
action was removed to federal court in Minnesota ("Federal Court").  On October 21, 2016,
the Federal Court held a hearing on the motion to transfer the action to the United States
District Court for the Southern District of New York ("SDNY Court"), a motion to remand
to state court and a motion to hear CWCAM's request for reconsideration of the motion to
dismiss.  On March 14, 2017, the Federal Court reserved the determination on the motion
to hear CWCAM's request for reconsideration of the motion to dismiss, denied the motion
to remand the matter to state court and granted the motion to transfer the proceeding
to the SDNY Court.  Cross motions for judgment on the pleadings were filed but the SDNY
Court was unable to decide the case based on the pleadings and the SDNY Court ordered
discovery.  All fact discovery was completed in December, 2018 and expert discovery was
completed on March 15, 2019.  The parties submitted cross motions for summary judgment,
and on March 19, 2020, the SDNY Court entered an opinion and order in which it granted
summary judgment in CWCAM's favor and held that CWCAM was entitled to the entire amount
of penalty interest and that CWCAM's determination of Yield Maintenance was correct.
In the 127-page opinion, the SDNY Court found for CWCAM on every issue presented by the
trustee's petition, namely, that the funds in dispute constitute penalty interest and
yield maintenance, not gain-on-sale proceeds, and that the amount of penalty interest
and yield maintenance was correctly calculated. An appeal of the SDNY Court's decision
was taken on April 29, 2020.  Oral argument on the appeal occurred on June 21, 2021.
On July 14, 2022, the Second Circuit entered a decision affirming in part and reversing
in part the SDNY Court's decision and remanding to the SDNY Court for further proceedings.
The Second Circuit affirmed the SDNY's Court holding that Penalty Interest and Yield
Maintenance are paid before Gain-On-Sale Proceeds.  The Second Circuit reversed and
remanded for further proceedings that portion of the SDNY Court's decision related
to approximately $67.2 million in interest on advances.   On January 13, 2023, the
parties entered into a settlement agreement, in which (among other things) they agreed
to stipulate that the amount of interest on advances that accrued on or before
June 3, 2014 is $27.5 million, and that CWCAM would pay that amount into escrow for
distribution to certificateholders upon the entry of an order by the Court approving
the settlement.  U.S. Bank National Association, as Trustee for the trusts, provided
notice of the settlement to all parties in interest via a notice program approved
by the Court.  A hearing on the settlement is scheduled for March 16, 2023.

On December 1, 2017, a complaint against CWCAM and others was filed in the United States
District Court for the Southern District of New York styled as CWCapital Cobalt Vr
Ltd. v. CWCapital Investments LLC, et al., No. 17-cv-9463 (the "Original Complaint").
The gravamen of the Original  Complaint alleged breaches of a contract and fiduciary
duties by CWCAM's affiliate, CWCapital Investments LLC in its capacity as collateral
manager for the collateralized debt obligation transaction involving CWCapital Cobalt
Vr, Ltd. In total, there are 14 counts pled in the Original Complaint. Of those 14, 5
claims were asserted against CWCAM for aiding and abetting breach of fiduciary duty,
conversion and unjust enrichment. On May 23, 2018, the Original Complaint was dismissed
for lack of subject matter jurisdiction.   On June 28, 2018, CWCapital Cobalt Vr Ltd.
filed a substantially similar complaint in the Supreme Court of the State of New York,
County of New York styled as CWCapital Cobalt Vr Ltd. v. CWCapital Investments LLC, et al.,
Index No. 653277/2018 (the "New Complaint").  The gravamen of the New Complaint is the
same as the previous complaint filed in the United State District Court for the Southern
District of New York.  In total there are 16 counts pled in the New Complaint. Of
those 16 counts, 5 claims were asserted against CWCAM for aiding and abetting breach of
fiduciary duty, conversion and unjust enrichment, 1 count seeks a declaratory judgement
that the plaintiff has the right to enforce the contracts in question and 1 count seeks
an injunction requiring the defendants to recognize the plaintiff as the directing holder
for the trusts in question. On January 11, 2019, the plaintiff dismissed with prejudice
the declaratory judgment and injunction counts.  The New Complaint and related summons
was not served on the defendants until July 13, 2018 and July 16, 2018.  The plaintiff's
motion for a preliminary injunction was denied by the court on July 31, 2018.  On
August 3, 2018, the defendants, including CWCAM, filed a motion to dismiss the New
Complaint in its entirety. On August 20, 2019, the court entered an order granting defendants'
motion almost in its entirety, dismissing 11 of the 16 counts and partially dismissing 2
additional counts.  Of the remaining counts, 2 are asserted against CWCAM for aiding and
abetting breach of fiduciary duty and unjust enrichment.  On September 19, 2019, CWCapital
Cobalt Vr Ltd. filed a notice of appeal relating to the August 20, 2019 dismissal order and
on September 26, 2019, filed an amended complaint against CWCI and CWCAM attempting to
address deficiencies relating to certain of the claims dismissed by the August 20, 2019
order.  CWCI and CWCAM filed its Motion to Dismiss the amended complaint on October 28, 2019.
The court heard argument on the Motion to Dismiss the amended complaint on January 22, 2020
and on October 23, 2020, the court granted the motion dismissing the amended claims.  On
November 30, 2020, CWCapital Cobalt Vr Ltd filed a notice of appeal relating to the
October 23, 2020 dismissal order.  On April 27, 2021, the First Department affirmed the
dismissal as to claims against CWCAM that were part of the August 20, 2019 dismissal,
but reversed the dismissal of two counts for breach of the Collateral Management Agreement
against CWCI.  CWCI sought leave to file an appeal of the decision. The plaintiff also
sought leave to appeal the dismissal of the claims against CWCAM.  Both requests for
leave were denied by the First Department.  On May 15, 2020, CWCI and CWCAM filed a
motion to renew its motion to dismiss as to 4 of the remaining counts (including the
remaining two counts against CWCAM for aiding and abetting breach of fiduciary duty and
unjust enrichment), based on a decision entered by Judge Failla in a trust instruction
proceeding  in the US District Court for the Southern District of New York awarding summary
judgment in favor of CWCAM.  On September 7, 2021, the court denied the motion to renew.
CWCI and CWCAM filed a notice of appeal, which they perfected by the filing of their
opening brief on July 1, 2022.  On November 15, 2022, the First Department affirmed the
court's denial of the motion to renew.  On October 1, 2021, CWCI and CWCAM moved to
reargue the denial of the motion to renew (or alternatively, the motion to dismiss) with
respect to certain of Cobalt's claims, including the remaining 2 claims against CWCAM,
based on the First Department's April 27, 2021 decision.  On March 24, 2022, the court
denied the relief sought in the motion to reargue.  CWCI and CWCAM have appealed the
court's decision on the motion to reargue and filed their opening brief on July 11, 2022.
The appeal was dismissed as being non-appealable on August 30, 2022.  CWCAM believes
that it has performed its obligations under the related pooling and servicing agreements
in good faith and the remaining allegations in the New Complaint are without merit.

Item 10.  Exhibits.
(a) The following is a list of documents filed as part
    of this Report on Form 10-D:

(99.1)   Monthly Report distributed to holders of the
         certificates issued by COMM 2016-DC2 Mortgage Trust,
         relating to the February 10, 2023 distribution.

(b) The exhibits required to be filed by the Registrant
    pursuant to this Form are listed above.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Deutsche Mortgage & Asset Receiving Corporation
(Depositor)


/s/ R. Chris Jones
Name:  R. Chris Jones
Title: Director


/s/ Matt Smith
Name:  Matt Smith
Title: Director



Date:    February 22, 2023