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Little Big Mistakes: The Second Circuit Rules on GM/JP Morgan

posted by Melissa Jacoby

PencilCulminating a two-year appeals process, the United States Court of Appeals for the Second Circuit just ruled that the statement filed to terminate a financing statement perfecting a security interest was effective. Yes, the parties intended to terminate a different financing statement, but that doesn't change the outcome under the facts of this dispute (these facts have been the subject of several prior Credit Slips posts; see here and here and here).

Today's per curiam decision cites the Restatement (Third) of Agency for the proposition that "Actual authority . . .  is created by a principal's manifestation to an agent that the agent take action on the principal's behalf."  And, says the panel, that's what happened. Again, full (and fairly brief) opinion is here.

Pencil image courtesy of Shutterstock

January 21, 2015 at 1:22 PM in Bankruptcy Generally, Secured Lending

Comments

One hopes that the law firm has $300 million in malpractice insurance.

Posted by: Allan | January 21, 2015 at 02:04 PM

The lien mistakenly released was or the $1.5 bn term loan, not the $300 mn synthetic lease. This has to be a record for a UCC screw-up.

Posted by: Joe | January 26, 2015 at 11:56 PM

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