NEW YORK (Legal Newsline) - An Alabama employee retirement system is suing a large banking corporation and law firm over claims of negligence resulting in the plaintiff's loss of security interest.
The Employees' Retirement System of the City of Montgomery, individually and for all others similarly situated, filed a class action complaint on July 30 in U.S. District Court Southern District of New York against JPMorgan Chase Bank N.A. and Simpson Thacher & Bartlett LLP, alleging breach of contract, fraud and negligence.
The complaint states that the plaintiff was a participant in the 2006 General Motors secured term loan, for which JPMorgan was the administrative agent.
In October 2008, JPMorgan, with Simpson Thacher & Bartlett as counsel, authorized the release of security interest it held as secured party of record for the term loan, which it was prohibited from doing without the written consent of each lender, according to the complaint.
When General Motors filed for bankruptcy protection on June 1, 2009, it paid JPMorgan all of the principal and interest due on the term loan, which JPMorgan then paid to the plaintiff and other participants in the term loan, the suit says.
However, according to the complaint, JPMorgan did not inform the plaintiff or other participants that the security interest would likely be challenged by the Creditors Committee and determined that it had been terminated, resulting in the plaintiffs and others requiring to pay back the funds JPMorgan distributed to them.
JPMorgan then intentionally concealed from the plaintiff and other participants its above-mentioned filing that terminated the security interest on the term loan, according to the complaint.
The plaintiff and others in the class seek actual damages and declaratory relief, plus court costs.
The plaintiff is represented by Thomas V. Urmy Jr., Edward F. Haber, and Michelle H. Blauner of Shapiro Haber & Urmy LLP in Boston; Bobby Segall of Copeland Franco PA in Montgomery, Ala.; and Roy Katriel of The Katriel Law Firm PC in La Jolla, Calif.
U.S. District Court Southern District of New York case number: 1:15-cv-06002