FinalCutJulAug

In a simple two sentence decision, the Second Circuit Court of Appeals denied JP Morgan Chase’s petition for a hearing en banc — a hearing before all active Second Circuit judges — regarding a prior decision on the mistaken termination of UCC financing statements securing its $1.5 billion loan to General Motors, which resulted in a significant victory for GM’s unsecured creditors.

Jeffrey A. Wurst, senior partner with law firm Ruskin Moscou Faltischek, reported that the “active members of the Court considered the request” and denied it. Wurst noted it is not likely that JPM will appeal this decision to the next level, the U.S. Supreme Court, nor that the Supreme Court would consider hearing such an appeal as the Court generally does not hear cases of 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.”