This hearing arises from a question certified by the United States Court of Appeals for the Second Circuit in General Motors's bankruptcy proceedings. Plaintiff, the Committee for Unsecured Creditors, claims that a mistakenly filed UCC-3 form terminated much of defendant J.P. Morgan's secured interest in a $1.5 billion loan. However, J.P. Morgan argued that the reference to that loan was erroneous, there was no intent to terminate the security in that loan and it retains its security interest, despite the UCC-3 filing.
The Second Circuit Court of Appeals certified the following question to the Delaware Supreme Court: Under UCC Article 9, as adopted into Delaware law by Del. Code Ann. tit. 6, art. 9, for a UCC-3 termination statement to effectively extinguish the perfected nature of a UCC-1 financing statement, is it enough that the secured lender review and knowingly approve for filing a UCC-3 purporting to extinguish the perfected security interest, or must the secured lender intend to terminate the particular security interest that is listed on the UCC-3?
Recording Disclaimer: This proceeding was recorded in full.