In Racepoint Partners, LLC v. JPMorgan Chase Bank, N.A. , Racepoint Partners sued JPMorgan for breach of contract and fiduciary duty.
After Enron Corporation filed for bankruptcy in 2001, Racepoint purchased Enron's notes. (JPMorgan served as the indenture Trustee.)
Racepoint alleged that, according to the indenture agreement, Enron was supposed to supply JPMorgan with financial statements which complied with federal securities law. Its failure to do so, Racepoint argued, comprised an event of default under the parties' agreement.
When the New York County Supreme Court dismissed Racepoint's case, an appeal to the Appellate Division, First Department, followed.
The AD1 found Enron only had to provide copies of the documents in question when those materials were filed with the SEC. Without those submissions, no default or breach of the agreement had been triggered.
Did the AD1 restore a bank's "trust?"
To download a copy of the Appellate Division's decision, please use this link: Racepoint Partners, LLC v. JPMorgan Chase Bank, N.A.