Daily News: May 1, 2015

Update: JPMorgan Denied Rehearing on $1.5B Error

In March, ABF Journal reported, citing information received from Jeffrey A. Wurst, senior partner with law firm Ruskin Moscou Faltischek, that the Second Circuit Court of Appeals’ decision concerning JP Morgan Chase’s mistaken release of its UCC financing statements securing its $1.5 billion loan to General Motors resulted in a significant victory for GM’s unsecured creditors.

The ABF Journal also subsequently reported that JPMorgan Chase had petitioned the Second Circuit for a hearing en banc — a hearing before all of the active judges sitting on the Second Circuit in hopes of getting a change from the original decision. 

In an update, Wurst reported that in a simple two sentence decision, the “active members of the Court considered the request” and denied it. Wurst noted he does not believe it likely that JPM would appeal this decision to the next level, the United States Supreme Court, nor that the Supreme Court would consider hearing such an appeal inasmuch as the Court generally does not hear cases on this type. 

Wurst said, “Accordingly, this is likely the end of the road for JPM, and the rest of us must heed the warning that we will be bound by any release of a financing statement authorized by us — even if the authorization was made in error.”

Editor’s note: Jeffrey A. Wurst, a regular contributor to the ABF Journal, is a senior partner and the chair of the Financial Services, Banking & Bankruptcy Department at Ruskin Moscou Faltischek, Uniondale, NY. He can be reached at 516-663-6535 or at jwurst [at] rmfpc [dot] com.

To read the original article in ABF Journal , click here.