Monday, January 26, 2015

Court: BigLaw firms missed $1.5B error, erasing JPMorgan's security interest in GM loan

". . . .The problems began when a partner at Mayer Brown instructed an associate to draft documents to release the bank’s security interest in $300 million in financing that GM was paying off, according to opinion. The associate asked a paralegal to search for UCC-1 financing statements documenting the security interest. The associate found the correct two documents, along with a third–the most important financing statement for an unrelated $1.5 billion loan by a syndicate of lenders for which JPMorgan Chase was the secured party of record.
“No one at General Motors, Mayer Brown, JPMorgan, or its counsel, Simpson Thacher & Bartlett, noticed the error,” though documents were sent to each organization for review, the appeals court said. A lawyer at Simpson Thacher had responded, “Nice job on the documents.” The mistake went unnoticed until GM’s bankruptcy in 2009." More.

Originally posted by Debra Cassens Weiss in ABA Journal News.  Jan. 22, 2015
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