The Delaware Supreme Court has found that a mistake in a UCC-3 termination statement does not invalidate the document under the state's Uniform Commercial Code. The decision, on a certified question from the United States Court of Appeals for the Second Circuit, and after oral arguments broadcast by CVN, affects a nearly $1.5 billion loan by J.P. Morgan to the former General Motors. In re Motors Liquidation Co.
CVN will broadcast live from the Delaware Supreme Court Wednesday as it hears arguments striking to the heart of what’s needed to terminate a security interest under that state’s uniform commercial code. In Re Motors Liquidation Co., et al.
The case’s central question stems from two secured transactions, a synthetic lease and a $1.5 billion term loan, taken out by General Motors, with J.P. Morgan as the secured party of record. Both transactions were secured by UCC-1 financing statements. However, when the parties filed UCC-3 forms to repay the synthetic lease, one of those forms mistakenly listed the term loan.