Contracts
Jan. 29, 2015
Do try to avoid $1.5 billion mistakes
A recent 2nd Circuit decision is a harsh reminder that even a $1.5 billion mistake could have been avoided with thorough due diligence. By Merdaud Jafarnia
Last week, the 2nd U.S. Circuit Court of Appeals ruled that a creditor's $1.5 billion security interest was extinguished because a third party filed an erroneous Uniform Commercial Code termination statement - a UCC-3 statement - with the creditor's consent. Because the creditor and their counsel knew that the third party intended to file the statement and had reviewed a draft, the court reasoned that the third party's law firm did...
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