Simpson Suit 1

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 1 of 38
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
OAKLAND POLICE AND FIRE

RETIREMENT SYSTEM, individually and on
behalf of all others similarly situated,
Case No.
Plaintiff,
v.
JURY TRIAL DEMANDED
JPMORGAN CHASE BANK, N.A. and

SIMPSON THACHER & BARTLETT LLP,
Defendants.
CLASS ACTION COMPLAINT

Plaintiff, on behalf of itself and all others similarly situated, by and through its
undersigned counsel, hereby files this Class Action Complaint against Defendants JPMorgan
Chase Bank, N.A. (JPMorgan) and Simpson Thacher & Bartlett LLP (Simpson Thacher),
and alleges as follows on information and belief:
SUMMARY OF THE ACTION

1.!
This is a class action brought by Plaintiff City of Oakland Police and Fire
Retirement System (Plaintiff or PFRS) on behalf of a class of entities that participated in a

secured Term Loan with General Motors Corporation (General Motors).
2.!
In 2006, General Motors, as borrower, entered into a $1.5 billion term loan with
a syndicate of lenders. JPMorgan served as the administrative agent on the term loan and owed
certain duties to the syndicate of lenders with respect to maintaining and monitoring the term
loan collateral. Plaintiff and a class of more than 400 entities participated in the term loan
syndication.
3.!
In 2008, the security interest underlying the term loan was erroneously released
by the filing of a termination statement, which was improperly reviewed and authorized by
Simpson Thacher and JPMorgan.
4.!
As a result of the filing of the erroneous termination statement, caused by
JPMorgans gross negligence and breach of contract and Simpson Thachers gross negligence
and negligent misrepresentation, the value of Plaintiffs and the other term loan lenders
investment in the $1.5 billion term loan has been substantially lost.
5.!
Plaintiff, on behalf of itself and the class of term loan participants, brings this
action against Defendants JPMorgan and Simpson Thacher to recover damages and such other
relief as is just and proper.
PARTIES
6.!
Plaintiff Oakland Police and Fire Retirement System is a public pension trust
fund established by Article XXVI of the Oakland City Charter. PFRS is a closed, singleemployer defined benefit pension plan that provides retirement compensation to the City of
Oakland, Californias retired police officers and firefighters. As of June 30, 2013, PFRS
membership consisted of 597 police and 445 fire retirees and beneficiaries, in addition to one
currently employed and fully vested police member. PFRS is located in Oakland, California.
7.!
Defendant JPMorgan is a national banking association that is the principal bank
subsidiary of JPMorgan Chase & Co. JPMorgans headquarters and principal place of business
is 270 Park Avenue, New York, New York 10017. JPMorgan acted at all relevant times
through its authorized partners and employees, who acted as agents within the scope of their
authority, including but not limited to Richard W. Duker, its managing director.
8.!
Defendant Simpson Thacher is a limited liability partnership and law firm
organized under the laws of the State of New York. Simpson Thacher is headquartered and has
its principal place of business at 425 Lexington Avenue, New York, New York 10017.
Simpson Thacher acted at all relevant times through its authorized partners and employees,
who acted as agents within the scope of their authority, including but not limited to Mardi
Merjian, one of its attorneys.
9.!
The Defendants JPMorgan and Simpson Thacher are sometimes collectively
referred to herein as the Defendants.
JURISDICTION AND VENUE

10.!
This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.
1332(d) because the amount in controversy exceeds $5,000,000 exclusive of interest and
costs, there are hundreds of Class members, and Plaintiff, along with numerous members of the
Class, is a citizen of a different state than Defendants.
11.!
This Court has personal jurisdiction over Defendants because Defendants
regularly do business in the State of New York, are headquartered and have principal places of
business in the State of New York, and/or have been established under the laws of the State of
New York.
12.!
Venue is proper under 28 U.S.C. 1391(b) because (1) Defendants are subject
to personal jurisdiction in this District, and (2) a substantial part of the events or omissions
giving rise to Plaintiffs claims occurred in this District. Defendants also regularly do business
in this District.
FACTS
I.!
JPMorgan, General Motors, and the Syndicate

of Lenders Enter into a $1.5 Billion Term Loan.
13.!
In 2006, General Motors, as Borrower, Saturn Corporation, as Guarantor,
JPMorgan, as Administrative Agent, and a syndicate of lenders entered into a $1.5 billion term
loan secured by a first-priority lien on certain assets of General Motors (the Term Loan).
14.!
The parties signed the Term Loan Agreement, dated as of November 29, 2006
(the Term Loan Agreement), which sets forth the rights and responsibilities of the parties.
15.!
In connection with the Term Loan Agreement, the parties also entered into a
collateral agreement, dated as of November 29, 2006 (the Collateral Agreement), which sets
forth their rights and responsibilities with respect to the collateral which secured the Term
Loan.
16.!
The Term Loan was syndicated to a group of over 400 lenders (the
Syndicate). The Plaintiff and all members of the putative class held an interest in the Term
Loan syndication. Loan syndication is the process by which a group of lenders fund various
portions of the loan in order to limit the risk exposure of a single lender.
17.!
Richard W. Duker (Duker), as managing director of JPMorgan, signed the
Term Loan Agreement and Collateral Agreement on behalf of JPMorgan. Duker has worked
for JPMorgan for over twenty-five years and has been responsible for JPMorgans credit
relationship with General Motors since 1999.
18.!
On November 30, 2006, the Term Loan parties caused a UCC-1 financing
statement to be filed with the Delaware Department of State, perfecting the Term Loan security
interest in certain General Motors property. The UCC-1 financing statement was file-stamped
by the Delaware Department of State as filing number 6416808 4 (the Term Loan Financing
Statement).
II.!
JPMorgan and General Motors Agree to Terminate an Unrelated Borrowing.

19.!
In September 2008, General Motors contacted JPMorgan to pay off a separate
and unrelated borrowing that was nearing maturity. The borrowing was a 2001 synthetic lease
between General Motors, as Lessee, JPMorgan, as Administrative Agent, and various lenders
and other parties (the Synthetic Lease). The outstanding borrowing on the Synthetic Lease
was approximately $150 million. The parties agreed that General Motors would purchase the
Synthetic Lease properties from JPMorgan and that the parties would terminate the Synthetic
Lease and the underlying security interests (the Synthetic Lease Payoff). The parties had no
intention of amending, terminating, or otherwise modifying the $1.5 billion Term Loan or its
corresponding security interest.
20.!
On September 30, 2008, General Motors instructed its counsel, Mayer Brown, to
prepare the necessary documentation to effect the payoff of the Synthetic Lease. Robert
Gordon (Gordon) was the partner at Mayer Brown responsible for the Synthetic Lease Payoff
and was responsible for supervising all work performed by Mayer Brown in connection with it.
Gordon had worked in the real estate group of Mayer Brown since 1979 and had been a partner
with the firm since 1986.
21.!
On October 1, 2008, Gordon instructed his associate, Ryan Green (Green) to
prepare a closing checklist for the Synthetic Lease Payoff (the Closing Checklist) and draft
the documents necessary to complete the transaction. Green graduated from law school in 2005
and began practicing in Mayer Browns real estate group in June 2007.
III.!
Simpson Thacher Reviewed and Authorized

the Erroneous Term Loan Termination Statement.
22.!
On October 7, 2008, Green contacted Michael Perlowski (Perlowski), a
paralegal at Mayer Brown, and asked Perlowski to run a UCC search on General Motors in
Delaware and Michigan to determine which UCC financing statements needed to be
terminated.
23.!
Perlowski responded to Greens request by emailing him three effective UCC
filings against General Motors in favor of JPMorgan. Two of the three UCC filings from the
prior search were dated as of April 2002 and referenced the Synthetic Lease real property as
collateral. The third UCC filing was the unrelated Term Loan Financing Statement, which
perfected the security interest in the unrelated $1.5 billion Term Loan.
24.!
The Term Loan Financing Statement included in Perlowskis email was dated
November 30, 2006, four years later than the Synthetic Lease financing statements. The Term
Loan Financing Statement included an Annex I, which unlike the real property identified in
the Synthetic Lease financing statements, listed all equipment, fixtures and related collateral
located at U.S. manufacturing facilities as collateral. Moreover, Annex I to the Term Loan
Financing Statement identified the Credit Agreement and Collateral Agreement, each dated
November 29, 2006. Although the Synthetic Lease was dated 2001, and although the Synthetic
Lease transaction did not include any documents entitled Credit Agreement or Collateral
Agreement, Green nevertheless listed the completely unrelated Term Loan Financing Statement
on the Synthetic Lease Closing Checklist as a UCC financing statement to be terminated upon
the payoff of the Synthetic Lease.
25.!
On October 15, 2008, Green emailed Arun Sundaram (Sundaram), one of his
client contacts at General Motors, a draft of the Closing Checklist which listed the Term Loan
Financing Statement as a UCC filing for which a termination statement would be prepared.
Sundaram forwarded the documents to Duker at JPMorgan.
26.!
On October 15, 2008, Green also emailed a draft of the Closing Checklist to
Mardi Merjian (Merjian), an attorney at Simpson Thacher. Simpson Thacher represented

JPMorgan in connection with the Synthetic Lease Payoff. Merjian was the attorney responsible
for the matter. Merjian has practiced as a real estate attorney with Simpson Thacher in its New
York office since 1987, and his legal practice often involves UCC filings. Merjian has
represented JPMorgan since he began his legal practice with Simpson Thacher in 1987.
27.!
Upon receipt of Greens email, Merjian forwarded the email with the Closing
Checklist attachment to Duker at JPMorgan.

28.!
Later on October 15, 2008, Green circulated an updated, but substantially
similar draft of the Closing Checklist to Merjian at Simpson Thacher. Gordon and Stuart
Gonshorek (Gonshorek), a paralegal at Mayer Brown, were copied on the email. The updated
version of the Closing Checklist still erroneously listed the termination of the Term Loan
Financing Statement, which secured the unrelated $1.5 billion Term Loan. Also attached to this
email were drafts of the closing documents for the Synthetic Lease Payoff. Among these
documents was a UCC-3 termination statement that, if filed, would terminate the Term Loan
Financing Statement (the Erroneous Termination Statement).
29.!
The first line of the Erroneous Termination Statement reads INITIAL
FINANCING STATEMENT FILE #6416808 4 on 11.30.06. (Emphasis added.) The other

financing statements to be terminated were dated as of April 2002.
30.!
Upon receipt of the updated Closing Checklist and closing documents (including
the Erroneous Termination Statement), Merjian forwarded the documents to Duker at

JPMorgan. According to his testimony in the Adversary Bankruptcy Proceeding (as defined
below), Duker is familiar with how UCC filings operate and understands the purpose of UCC
financing and termination statements. Duker received Merjians email but was unable to open
or review the documents because the attachments were corrupted. Duker never requested
additional copies of the documents from Merjian or any of the other persons involved in the
Synthetic Lease Payoff, and Duker never reviewed the Synthetic Lease Payoff documents.
31.!
On October 17, 2008, Merjian replied to Greens email, which included the
Closing Checklist and Erroneous Termination Statement as an attachment, stating:

Ryan Nice job on the documents. My only comment, unless I am missing
something, is that all references to JPMorgan Chase Bank as Administrative
Agent for the Investors should not include the reference for the Investors.
(Emphasis added.)
32.!
Merjian provided no further comments to the Closing Checklist or Erroneous
Termination Statement.
IV.!
Simpson Thacher Executes Escrow Instructions Authorizing

the Filing of the Term Loan Termination Statement.
33.!
On October 24, 2008, Green, the Mayer Brown associate, emailed draft escrow
instructions (the Escrow Instructions) for the closing of the Synthetic Lease Payoff to
Merjian at Simpson Thacher.
34.!
The Escrow Instructions listed each of the documents to be filed or signed in
connection with the Synthetic Lease Payoff. Item Number 2 of this list included the Erroneous
35.!
On October 27, 2008, Green emailed Merjian asking Do you have any
comments to the draft escrow letter?

36.!
On October 27, 2008, Merjian replied to Greens email stating it was fine.
37.!
The Escrow Instructions were subsequently signed by Green, as attorney for
General Motors, and Merjian as attorney for JPMorgan.
V.!
The Erroneous Termination Statement Is

Filed with the Delaware Department of State.
38.!
On October 30, 2008, the Synthetic Lease Payoff closed and Green told
Gonshorek to file the Erroneous Termination Statement.

39.!
On October 30, 2008, Gonshorek caused the Erroneous Termination Statement
to be filed with the Delaware Department of State, thereby terminating the $1.5 billion security
interest for the Term Loan.
40.!
No one at JPMorgan, including Duker, ever asked any questions about or
communicated any changes to the Erroneous Termination Statement.

41.!
No one at Simpson Thacher, including Merjian, ever asked any questions about
or communicated any changes to the Erroneous Termination Statement.

VI.!
JPMorgan Breached the Term Loan Agreement by Authorizing

the Filing of the Erroneous Termination Statement.
42.!
Under Section 10.01(vii) of the Term Loan Agreement, JPMorgan was
prohibited from releasing all or substantially all of the Collateral from the Liens of the
Security Documents without the written consent of each Lender.
43.!
In authorizing the filing of the Erroneous Termination Statement, JPMorgan
released substantially all of the Collateral from the Liens of the Security Documents without
the consent of the Term Loan lenders and thereby breached the Term Loan Agreement.
44.!
As a direct and proximate result of JPMorgans breach of the Term Loan
Agreement, on October 30, 2008, the Erroneous Termination Statement was filed with the
Delaware Department of State. As described below, on January 21, 2015, the United States
Court of Appeals for the Second Circuit held that the filing of the Erroneous Termination
Statement terminated the Term Loan security interest. None of the Term Loan lenders
consented to this release of the Term Loan security interest.
VII.!
JPMorgan Inquires about the Term Loan Collateral.

45.!
In May 2009, JPMorgan became concerned about the potential bankruptcy of
General Motors and the protection of the $1.5 billion security interest in the Term Loan.
Consequently, on May 6, 2009, Duker asked JPMorgans traditional credit products group
(TCP) for a summary of legal/collateral documentation including details on all UCC filings
regarding the Term Loan.
46.!
TCP told Duker to email IB Collateral Services to inquire about collateral, and
to email LienPerfection Bangalore to inquire about UCCs. Lien Perfection, Bangalore
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(Bangalore) is a JPMorgan division located in India that is responsible for tracking UCC
filings.
47.!
Bangalore responded to Dukers inquiry by erroneously providing
documentation for a completely different and unrelated loan. Duker never received the correct
UCC information from Bangalore and thus did not discover the Erroneous Termination
Statement.
VIII.! General Motors Files for Bankruptcy, and Morgan

Lewis Discovers the Erroneous Termination Statement.
48.!
On June 1, 2009, General Motors filed for protection under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District
of New York (the Bankruptcy Court).
49.!
Sometime in the middle of June 2009, Morgan Lewis & Bockius LLP, counsel
to JPMorgan, discovered that the Erroneous Termination Statement had been filed with the
Delaware Department of State.
50.!
On June 18, 2009, Morgan Lewis, on behalf of JPMorgan, informed the Official
Committee of Unsecured Creditors of Motor Liquidation Company f/k/a General Motors

Corporation (the Creditors Committee) of the filing of the Erroneous Termination
Statement. However, JPMorgan did not inform Plaintiff or, on information and belief, any of
the other Term Loan lenders that the Erroneous Termination Statement had been filed.
51.!
On June 25, 2009, the Bankruptcy Court entered a Debtor-in Possession Order
(the DIP Order), which approved repayment of the Term Loan in full with interest, subject to
the Creditors Committees right to investigate and challenge the perfection of the Term Loan
security interest. The final repayment amount was $1,481,656,507.70.
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52.!
General Motors repaid the Term Loan, in full with interest, to JPMorgan in early
July 2009. JPMorgan then distributed the principal and interest to each of the Term Loan
lenders in accordance with their ratable interest. However, JPMorgan failed to notify Plaintiff,
and on information and belief, any of the other Term Loan lenders that:
a.! the Erroneous Termination Statement had been filed with the Delaware
Department of State in 2008;
b.! the Term Loan security interest was subject to challenge by the Creditors
Committee;
c.! as a result of a Creditors Committee challenge, the security interest could be
deemed terminated in 2008; and
d.! Plaintiff and the other Term Loan lenders could be compelled to repay the
Term Loan funds.
IX.!
The Creditors Committee Files an Adversary Complaint, but JPMorgan Prevents

the Plaintiff and the Other Term Loan Participants from Discovering Its Errors.
53.!
On July 31, 2009, the Creditors Committee filed a complaint (the Adversary
Complaint) in the United States Bankruptcy Court for the Southern District of New York
(Motors Liquidation Company Avoidance Action Trust v. JPMorgan Chase Bank, N.A. et al,
No. 09-50026-reg) (the Adversary Proceeding). The complaint named as defendants
JPMorgan and all other Term Loan participants who had received Term Loan interest payments
in May 2009 or principal and interest payments pursuant to the July 2009 DIP Order. The
complaint alleged, inter alia, that the Term Loan security interest had been terminated in
October 2008 upon the filing of the Erroneous Termination Statement.
54.!
The Plaintiff has never been served with process in the Adversary Proceeding.
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55.!
On July 31, 2009, JPMorgan took affirmative steps to prevent the Plaintiff and
the other Term Loan participants from learning that the Adversary Proceeding had been filed.
JPMorgans actions had the intent and effect of preventing the Plaintiff and the other Term
Loan participants from learning that the Erroneous Termination Statement had been filed due to
the misconduct of Defendants, as alleged herein.
56.!
JPMorgan entered into stipulations with the Creditors Committee in the
Adversary Proceeding, which provided that service of process upon the Plaintiff and the other
Term Loan participants would be deferred until there was a final determination in the
Adversary Proceeding. Specifically,
a.! By Stipulation dated October 6, 2009 between JPMorgan and the Creditors
Committee, JPMorgan accepted service of the Adversary Complaint. The
stipulation recognized that the other defendants had not been served and
provided: The committee shall have 240 days to complete service on the
other defendants, without prejudice to seek an additional extension of time
to serve the summons and Complaint upon other defendants, if necessary.
b.! By Stipulation dated January 20, 2010, JPMorgan and the Creditors
Committee agreed to modify the October 6, 2009 stipulation to provide that:
The Committee shall have until thirty (30) days after the date of entry of
the Courts decision on any dispositive motion made under this modified
Stipulated Scheduling Order to serve the summons and complaint upon other
defendants.
c.! On March 25, 2013, JPMorgan and the Creditors Committee filed a
Proposed Order in the Adversary Proceeding that the time by which
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Plaintiff shall serve the Summons and Complaint upon the Other Defendants
is extended to thirty (30) days after the date of entry of a Final Order [by the
Bankruptcy Court, after appeals thereof], without prejudice to the right of
Plaintiff to seek additional extensions thereof. The Proposed Order was
entered by the Bankruptcy Court on April 10, 2013.
57.!
By entering into each of the above agreements and stipulations, JPMorgan
intentionally concealed from the Plaintiff and the other Term Loan participants that it had
authorized the filing of the Erroneous Termination Statement with the Delaware Department of
State.
58.!
By entering into each of the stipulations to defer service of the Summons and
Complaint on the Plaintiff and the other Term Loan participants, JPMorgan intentionally
concealed from the Plaintiff and the other Term Loan participants that the Creditors
Committee had challenged the perfection of the Term Loan security interest.
59.!
Pursuant to Article VII(g) of the Term Loan Agreement, an Event of Default has
occurred if any of the Security Documents shall cease, for any reason, to be in full force and
effect with respect to Collateral with a book value in excess of $25,000,000 in the aggregate, or
any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of
the Security Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby. (Emphasis added.)
60.!
General Motors is a Loan Party, as that term is defined in the Term Loan
Agreement. The Creditors Committee is an Affiliate of a General Motors, as that term is

defined in the Term Loan Agreement, and thus an Affiliate of a Loan Party under the Term
Loan Agreement.
14
61.!
In filing the Adversary Complaint, the Creditors Committee asserted that the
Term Loan security interest was no longer valid. Thus, under Article VII(g) of the Term Loan
Agreement an Event of Default occurred upon the filing of the Adversary Complaint because
the Creditors Committee, an affiliate of a loan party, had asserted that the security documents
of the Term Loan ceased to be in full force and affect with respect to collateral with a book
value in excess of $25,000,000.
62.!
JPMorgan had notice of this Event of Default on or about July 31, 2009, when it
was notified by the Creditors Committee that the Adversary Complaint had been filed.
63.!
Under Section 8.05 of the Term Loan Agreement, if JPMorgan is notified of an
Event of Default, it has an obligation to give notice thereof to the Lenders and to take such
action with respect to such Default or Event of Default as shall be reasonably directed by the
Majority Lenders.
64.!
Accordingly, under Section 8.05 of the Term Loan Agreement, JPMorgan had a
duty to give notice to the Plaintiff and the other Term Loan participants of the filing of, the
pendency of, and the claims asserted in the Adversary Proceeding. In breach of this duty under
the Term Loan, as well as its independent duties as an agent to the Term Loan participants,
JPMorgan never disclosed to Plaintiff and, on information and belief, any of the other Term
Loan participants that it had authorized the filing of the Erroneous Termination Statement and
that as a result of the Erroneous Termination Statement, the Creditors Committee had
challenged the Term Loan security interest.
65.!
Neither the Plaintiff nor, on information and belief, any of the other Term Loan
participants were informed by JPMorgan of the filing or pendency of the Adversary Proceeding
at any time from its filing on July 31, 2009 through May 2015.
15
66.!
Plaintiff had no knowledge of the Adversary Proceeding until July 2015.
67.!
On March 1, 2013, the Bankruptcy Court issued a decision in the Adversary
Proceeding, finding that the Term Loan Financing Statement was not terminated by the
Erroneous Termination Statement. See Official Comm. v. JPMorgan Chase Bank, NA (In re
Motors Liquidation Co.), 486 B.R. 596, 602 (Bankr. S.D.N.Y. 2013). The Creditors
Committee appealed the decision to the United States Court of Appeals for the Second Circuit.
X.!
The Second Circuit Rules the Erroneous Termination

Statement was Authorized by JPMorgan and Simpson
Thacher and Terminated the Term Loan Security Interest.
68.!
On January 21, 2015, the Second Circuit reversed the Bankruptcy Courts
decision and ruled that the Term Loan security interest had been terminated upon the filing of
the Erroneous Termination Statement. The Second Circuit wrote:
JPMorgans and Simpson Thachers repeated manifestations to Mayer Brown
show that JPMorgan and its counsel knew that, upon the closing of the
Synthetic Lease transaction, Mayer Brown was going to file the termination
statement that identified the Main Term Loan UCC-1 for termination and that
JPMorgan reviewed and assented to the filing of that statement. Nothing
more is needed.
Official Comm. of Unsecured Creditors of Motors Liquidation Co. v. JPMorgan Chase Bank,
N.A. (In re Motors Liquidation Co.), 777 F.3d 100, 105 (2d Cir. 2015).
69.!
JPMorgan did not inform the Plaintiff or, on information and belief, any of the
other Term Loan participants of the Second Circuits decision.

70.!
As detailed herein, JPMorgan consistently and repeatedly breached its
disclosure obligations under Section 8.05 of the Term Loan Agreement and its independent
duties as agent to the Term Loan participants by repeatedly failing to inform and notify the
Term Loan participants of the ongoing Event of Default.
16
XI.!
The Amended Adversary Complaint Now Seeks to Claw Back

the 2009 Term Loan Payments from the Term Loan Lenders.
71.!
On May 20, 2015, the Motors Liquidation Company Avoidance Trust (the
Avoidance Trust), as successor in interest to the Creditors Committee, filed a First Amended
Adversary Complaint (the Amended Complaint) in the Adversary Proceeding.
72.!
The Amended Complaint seeks to claw back from Plaintiff and the Term Loan
participants:
a.! the Term Loan interest payments received by Plaintiff and the Term Loan
participants in May 2009; and
b.! the Term Loan principal and interest payments received by Plaintiff and the
Term Loan participants in July 2009 pursuant to the DIP Order.
73.!
The Avoidance Trust asserts these claims on the basis that the Plaintiff and the
other Term Loan participants received payments as secured creditors when, in fact, they were
unsecured creditors due to JPMorgans and Simpson Thachers authorization of the Erroneous
ALL OF THE CLAIMS ASSERTED HEREIN HAVE BEEN TIMELY FILED

74.!
All of the claims asserted herein have been timely filed. To the extent that any
of the claims asserted herein against the Defendants could be found to have accrued beyond the
period set by any applicable statute of limitations, such limitations periods were tolled for
multiple reasons, rendering those claims timely.
17
75.!
First, all of the claims against the Defendants were tolled because the Plaintiff
did not discover and could not with reasonable diligence have discovered the facts underlying
the claims until June 2015.
76.!
As detailed herein, JPMorgan intentionally failed to disclose to the Plaintiff and
the other Term Loan participants that it had authorized the filing of the Erroneous Termination
Statement and that, as a result, the Creditors Committee had challenged the perfection of the
Term Loan Security Interest. JPMorgan intentionally withheld this information from the
Plaintiff and the Term Loan participants from June 2009 through the present, even though
JPMorgan had a duty to promptly disclose this information under the Term Loan Agreement
and, independently, as agent for the Term Loan participants.
77.!
The Plaintiff and the other Term Loan participants were entitled to rely on
JPMorgan, as their appointed agent, to preserve their security interest in the Team Loan and
had no obligation to inquire what information JPMorgan knew and was intentionally
withholding from them.
78.!
Having appointed JPMorgan as their agent to represent their interests on the
Term Loan, the Plaintiff and other Term Loan participants had no separate duty to monitor the
status of the Term Loan security interest. To require them to monitor the security interest of the
Term Loan, a task that they had already appointed JPMorgan to perform, would undermine the
entire intent and purpose of their appointment of JPMorgan as Administrative Agent.
79.!
Second, the claims against JPMorgan are also tolled by N.Y. C.P.L.R. 206(b)
because the Plaintiff and the other Term Loan participants are subject to a judgment against
them in the Adversary Proceeding as a result of the acts and omissions of their agent,
JPMorgan. Because all claims against JPMorgan arise from JPMorgans acts and omissions as
18
agent for the Plaintiff and the other Term Loan participants, all claims against JPMorgan are
tolled until judgment is entered against the Plaintiff and the other Term Loan participants.
80.!
Third, JPMorgan is equitably estopped from asserting a statute of limitations
defense to any claims against it, because JPMorgan fraudulently concealed the facts underlying
the claims against it, both through its affirmative conduct and through its failure to disclose to
the Plaintiff and the other Term Loan participants the facts regarding the release of the security
interest.
81.!
In order to avoid disclosure of the Erroneous Termination Statement, JPMorgan
entered into Stipulations with the Creditors Committee, which allowed the Creditors
Committee to defer service of the Adversary Complaint on Plaintiff and the other Term Loan
participants. These actions constitute affirmative conduct by JPMorgan to conceal material
information from the Plaintiff and the other Term Loan participants concerning claims that
could be asserted against JPMorgan.
82.!
Furthermore, JPMorgan deliberately concealed the filing of the Erroneous
Termination Statement and the release of the Term Loan security interest, facts that JPMorgan
had an affirmative duty to disclose to the Plaintiff and the other Term Loan participants.
JPMorgans deliberate breach of its duty to disclose provides additional and independent
grounds for equitable estoppel. JPMorgans affirmative duty to disclose arises from multiple
sources:
a.! as detailed herein, the Term Loan Agreement created an affirmative duty,
which required JPMorgan to notify the Lenders that the Creditors
Committee had challenged the enforceability of the security interest;
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b.! as the agent for the Plaintiff and the other Term Loan participants, JPMorgan
had an independent legal duty to disclose to the Plaintiff and the other Term
Loan participants material information relevant to the affairs entrusted to
JPMorgan, which JPMorgan knew the Plaintiff and the other Term Loan
participants would want to know, and which JPMorgan could have
communicated without violating a superior duty to a third party;
c.! as the agent for the Plaintiff and the other Term Loan participants, JPMorgan
had independent legal duties specifically to (i) notify the Plaintiff and the
other Term Loan participants that JPMorgan had acted beyond its actual
authority by releasing the Term Loan security interest and (ii) advise the
Plaintiff and the other Term Loan participants on the courses of action
reasonably available to the Plaintiff and the other Term Loan participants in
light of the actions of JPMorgan, Mayer Brown, and Simpson Thacher, as
detailed herein;
d.! JPMorgan possessed superior knowledge, not readily available to the
Plaintiff and the other Term Loan participants, and JPMorgan knew that the
Plaintiff and the other Term Loan participants were acting or refraining from
acting because they lacked such knowledge, giving rise to a legal duty for
JPMorgan to provide the relevant, material information to the Plaintiff and
the other Term Loan participants;
e.! there was inherent secrecy in JPMorgans conduct, since the Plaintiff and the
other Term Loan participants specifically relied upon JPMorgan as their
20
agent to act on their behalf in connection with the Term Loan, which gives
rise to a duty to disclose; and
f.! when JPMorgan provided partial information to Plaintiff and the Term Loan
participants at the time of the July 2009 principal and interest repayment,
JPMorgan was obligated to provide complete disclosure about the potential
clawback.
83.!
Furthermore, the Plaintiff filed this action within a reasonable time after
discovering the facts underlying its claim. The Plaintiff first learned of the release of the Term
Loan security interest in July 2015, and it promptly filed this suit within one month of that
discovery. Therefore, JPMorgan is equitably estopped from asserting that the claims asserted
against it are untimely.
84.!
Fourth, all claims against JPMorgan are additionally tolled by the continuing
representation doctrine. JPMorgan, the Plaintiff, and the other Term Loan participants had a
continuing relationship as agent and principal in connection with the Term Loan, and
JPMorgan purported to act on behalf of the Plaintiff and the other Term Loan participants
throughout the Adversary Proceeding. Claims against JPMorgan were tolled during its ongoing
representation of the Plaintiff and the other Term Loan participants.
85.!
Even if the Plaintiff and the other Term Loan participants had been notified of
the Adversary Proceedingwhich they were notthey would have been entitled to rely upon
JPMorgans continuing representation of their interests.
86.!
Furthermore, the Plaintiff and the other Term Loan participants specifically
appointed JPMorgan to act on their behalf and had an ongoing relationship with JPMorgan, and
they therefore were not required to sue JPMorgan while JPMorgan was still litigating their
21
interests in the Adversary Proceeding. Moreover, there was a relationship of trust between the
Plaintiff and the other Term Loan participants and JPMorgan because the Plaintiff and the other
Term Loan participants entrusted JPMorgan as their agent to preserve the security interest for
the Term Loan on their behalf.
CLASS ALLEGATIONS
87.!
Plaintiff seeks to represent a class defined as:
All Term Loan participants that received interest payments on the Term Loan in
May 2009 and/or received principal and interest payments on the Term Loan in or
about July 2009 (the Class).
Excluded from the Class are Defendant JPMorgan and any of its affiliates.
88.!
This action is brought and may be properly maintained as a class action pursuant
to Federal Rules of Civil Procedure 23(b)(2) and 23(b)(3). This action satisfies the numerosity,
ascertainability, commonality, typicality, adequacy, predominance, and superiority
requirements of these rules.
89.!
Numerosity under Rule 23(a)(1). There are several hundred members of the
Class, which is so numerous that the individual joinder of all members is impracticable. Each
of these Class members can be ascertained by referencing Defendants business records, which
contain the contact information for the participants in the Term Loan.
90.!
Commonality under Rule 23(a)(2). Common legal and factual questions exist
that predominate over any questions affecting only individual Class members. These common
questions, which do not vary among Class members and which may be determined without
reference to any Class members individual circumstances, include, but are not limited to:
22
a.! whether JPMorgan breached the Term Loan Agreement by authorizing the
filing of the Erroneous Termination Statement that released substantially all
of the collateral for the Term Loan without the consent of the Plaintiff and
the Class.
b.! whether JPMorgan breached its duty to the Plaintiff and the Class in its
performance of its duties as Administrative Agent under the Term Loan;
c.! whether JPMorgan acted recklessly and was grossly negligent when it
authorized the filing of the Erroneous Termination Statement;
d.! whether JPMorgan breached its duty to the Plaintiff and the Class and
violated the Term Loan Agreement by failing to inform the Plaintiff and the
Class that it had authorized the filing of the Erroneous Termination
Statement and that the Creditors Committee had asserted that the Term
Loan security interest had been released;
e.! whether JPMorgan fraudulently concealed from the Plaintiff and the Class
that it had authorized the filing of the Erroneous Termination Statement and
that the Creditors Committee had asserted that the Term Loan security
interest had been released;
f.! whether Simpson Thacher owed a duty to the Plaintiff and the Class,
independently or as a result of its duties to JPMorgan, in connection with its
review and approval of the Synthetic Lease closing documents, which
included the Erroneous Termination Statement;
g.! Whether Simpson Thacher acted negligently or was grossly negligent in its
review and approval of the closing documents for the Synthetic Lease, and
23
in particular, its review and approval of the Erroneous Termination

Statement; and
h.! whether Simpson Thacher made negligent misrepresentations with respect to
the Synthetic Lease closing documents and, in particular, with respect to the
inclusion therein of the Erroneous Termination Statement.
91.!
Typicality under Rule 23(a)(3). Plaintiffs claims are typical of the claims of the
members of the Class. Plaintiff alleges a common set of facts and theories of recovery against
Defendants relating to the Term Loan and the course of conduct that led to the release of the
Class members security interest in the Term Loan through the filing of the Erroneous
Termination Statement. Plaintiff and the Class seek identical remedies under identical legal
theories based on identical factual occurrences. There is no antagonism or factual variation
between the Plaintiffs claims and those of the Class.
92.!
Adequacy of Representation under Rule 23(a)(4). Plaintiff is an adequate Class
representative because the Plaintiff is a Class member, and the Plaintiffs interests do not
conflict with the Classs interests. Plaintiff will fairly and adequately protect and represent the
interests of each member of the Class. Plaintiff is fully cognizant of its responsibilities as Class
representative and has retained experienced counsel fully capable of, and intent upon,
vigorously prosecuting this action on behalf of the Class.
93.!
Superiority under Rule 23(b)(3). A class action is superior to other available
methods for the fair and efficient adjudication of the controversy within the meaning of Rule
23(b)(3) and in consideration of the matters set forth in Rule 23(b)(3)(A)-(D). The maintenance
of separate actions would place a substantial and unnecessary burden on the courts and could
24
result in inconsistent adjudications, while a single class action can determine, with judicial
economy, the rights of all members of the Class.
94.!
The Class can be properly maintained under Rule 23(b)(2). Defendants have
acted or refused to act on grounds that apply to the entirety of the Class such that final
injunctive or declaratory relief is appropriate respecting the Class as a whole.
95.!
The Class can be properly maintained under Rule 23(b)(3). A class action is
superior to other available methods for the fair and efficient adjudication of this litigation
because individual litigation of each Class members claim would create a risk of (a)
inconsistent or varying adjudications with respect to individual Class members that would
establish incompatible standards of conduct for the party opposing the Class, or (b)
adjudications with respect to individual Class members that, as a practical matter, would be
dispositive of the interests of the other members not parties to the individual adjudications or
would substantially impair or impede their ability to protect their interests.
FIRST CLAIM FOR RELIEF

Breach of Contract Against JPMorgan
96.!
Plaintiff, individually and on behalf of the Class, incorporates by reference all of
the allegations contained in the preceding paragraphs of this Complaint.

97.!
By reason of the conduct alleged herein, JPMorgan is liable to the Plaintiff and
the other Term Loan participants for its breaches of the Term Loan Agreement.
98.!
Pursuant to Section 8.01 of the Term Loan Agreement, each Term Loan
participant designated and appointed JPMorgan as its agent and authorized JPMorgan, as its
agent, to take such action on its behalf under the provisions of this Agreement and the other
25
Loan Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto.
99.!
Under Section 10.01(vii) of the Term Loan Agreement, JPMorgan had no
authority to release all or substantially all of the Collateral from the Liens of the Security
Documents without the written consent of each Lender.
100.! JPMorgan breached the Term Loan Agreement by authorizing Mayer Brown to
file the Erroneous Termination Statement, which released substantially all of the Collateral
from the Liens of the Security Documents without the written consent of each Lender.
101.! Under Article VII(g) and Section 8.05 of the Term Loan Agreement, JPMorgan
has a continuous duty to inform the Lenders and take direction given by a majority of them if
there is an Event of Default. An Event of Default occurs if any of the Security Documents
shall cease, for any reason, to be in full force and effect with respect to Collateral with a book
value in excess of $25,000,000 in the aggregate, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created thereby.
102.! In breach of these obligations, JPMorgan did not inform the Plaintiff, or on
information and belief, the other Term Loan participants that on July 31, 2009, an Event of
Default occurred when the Creditors Committee asserted that the Security Documents, with
respect to Collateral with a book value in excess of $25,000,000 in the aggregate, had ceased to
be in full force and effect.
103.! The Plaintiff and the other Term Loan participants were damaged as a direct and
proximate result of JPMorgans breaches of contract.
26
104.! Because JPMorgan breached its disclosure obligations with respect to the Event
of Default, which deprived the Plaintiff and the other Term Loan participants of their
opportunity to instruct JPMorgan as to what action to take against Mayer Brown, Simpson
Thacher and JPMorgan itself, JPMorgan had the obligation to take all reasonable steps to
ensure that any statutes of limitations on any claims that could be asserted against Mayer
Brown, Simpson Thacher, and JPMorgan itself, arising out of the conduct and events described
herein, would not expire. This could have included, but not have been limited to, entering into
tolling agreements with Mayer Brown, Simpson Thacher, and JPMorgan itself, which tolled the
running of the statute of limitations, or bringing those claims prior to any possible expiration of
any applicable statutes of limitations. Plaintiff does not know if any such tolling agreements
have been executed. Any failure by JPMorgan to meet the obligations described herein
constitute further damages caused by JPMorgans breach of contract.
SECOND CLAIM FOR RELIEF

Gross Negligence Against JPMorgan
105.! Plaintiff, individually and on behalf of the Class, incorporates by reference all of
106.! By reason of the conduct alleged herein, JPMorgan is liable to the Plaintiffs and
the other Term Loan participants for its gross negligence.
107.! Defendant JPMorgan entered into a contract to perform services as an agent and
therefore owed a duty of reasonable care to the Plaintiff and the other Term Loan participants.
108.! By authorizing Mayer Brown to file the Erroneous Termination Statement,
which released substantially all of the Term Loan security interest without the written consent
27
of each Lender, JPMorgan consciously and voluntarily disregarded its duty of reasonable care,
acting with reckless indifference to the rights of the Plaintiff and the other Term Loan
participants in performing its duties as an agent under the Term Loan. As a result, JPMorgan
breached its duty of care to the Plaintiff and the Class.
109.! Defendant JPMorgan further breached its duty of reasonable care by failing to
inform the Plaintiff and the other Term Loan participants that the Erroneous Termination
Statement had been filed with the Delaware Department of State and that the Creditors
Committee had asserted that the security interest had been terminated. JPMorgan knew the
Plaintiff and the other Term Loan participant would want this relevant information and could
have communicated this information without violating any duties to a third party. By failing to
provide this information, JPMorgan intentionally concealed incriminating facts in order to
prevent the Plaintiff and the other Term Loan participants from learning about its egregious
conduct and the grave consequences. JPMorgan acted with reckless indifference to the rights of
the Plaintiff and the other Term Loan participants.
110.! JPMorgan owed a duty to the Plaintiff and the other Term Loan participants to
take action only within the scope of its actual authority as agent and to comply with all lawful
instructions received from the participants in the Term Loan.
111.! JPMorgan took actions beyond the scope of its actual authority as agent, and in
contravention of the lawful instructions of the Term Loan participants, when it authorized
Mayer Brown to file the Erroneous Termination Statement, which released substantially all of
the Term Loan security interest without the written consent of each Lender.
112.! As a result of the actions taken beyond the scope of its authority and in
contravention of the lawful instruction of the Term Loan participants, JPMorgan is liable to the
28
Plaintiff and the other Term Loan participants for all losses caused by its unauthorized actions.
This liability includes any losses that stem from actions taken by JPMorgan with apparent
authority and that resulted in the Term Loan participants liability to the Creditors Committee.
113.! In allocating the potential risk of loss, the Term Loan Agreement expressly
states that JPMorgan can be held liable for its own gross negligence or willful misconduct.
114.! The Plaintiff and the other Term Loan participants were damaged by
JPMorgans reckless and grossly negligent breaches of the foregoing duties, and their damages
were the foreseeable and expected result of these breaches.
proximate result of JPMorgans reckless and grossly negligent breaches of its duty of care.
THIRD CLAIM FOR RELIEF

Fraudulent Concealment Against JPMorgan
117.! By reason of the conduct alleged herein, JPMorgan is liable to the Plaintiff and
the other Term Loan participants for fraudulent concealment.
118.! In June 2009, JPMorgan learned that the Erroneous Termination Statement had
been filed with the Delaware Department of State and that the Term Loan security interest in
the collateral had been terminated.
119.! JPMorgan did not disclose this material information to the Plaintiff or, on
information and belief, to any of the other Term Loan participants. Furthermore, when
JPMorgan distributed the Term Loan repayment in July 2009, JPMorgan failed to disclose to
29
the Plaintiff and other Term Loan participants that the Term Loan security interest could be
challenged and that the Plaintiff and the other Term Loan participants could be compelled to
return the proceeds of the repayment. By distributing the loan proceeds without disclosing that
the payment might be subject to clawback, JPMorgan omitted material information needed to
make its partial disclosure complete.
120.! On July 31, 2009, the Creditors Committee commenced an Adversary
Proceeding against JPMorgan, claiming that the Term Loan security interest had been
terminated by the Erroneous Termination Statement.
121.! The Plaintiff and the other Term Loan participants were named as defendants in
the Adversary Proceeding. However, in order to avoid the disclosure that it had authorized the
Erroneous Termination Statement, JPMorgan entered into a Stipulation with the Creditors
Committee allowing the Creditors Committee to defer service of the Adversary Proceeding
Complaint, thereby engaging in further affirmative steps to conceal this material information
from the Plaintiff and the other Term Loan participants.
122.! JPMorgan acted with full knowledge and intent and was motivated by its
interest in protecting itself from the legal consequences of its misconduct.
123.! JPMorgan had a duty to disclose the concealed material information because:
a.! the Term Loan Agreement obligated JPMorgan to notify the Plaintiff and the
other Term Loan participants about the claim that had been made by the
Creditors Committee challenge to the enforceability of the security interest
in most of the collateral pledged to secure the Term Loan;
b.! as an agent, JPMorgan had an independent legal duty to disclose information
relevant to the affairs entrusted to JPMorgan by the Term Loan participants,
30
which JPMorgan knew the Plaintiff and the other Term Loan participants
would wish to have and which JPMorgan could have communicated without
violating any duties to a third party;
c.! JPMorgan possessed superior knowledge, not readily available to the
Plaintiff and the other Term Loan participants, and knew that the Plaintiff
and the other Term Loan participants were acting or refraining from acting
on the basis of that mistaken knowledge; and
d.! by providing partial information at the time of the distribution in July 2009,
JPMorgan was obligated to provide complete disclosure about the potential
clawback.
124.! The Plaintiff and the other Term Loan participants were lulled into inaction by
JPMorgans deliberate silence, notwithstanding its duty to disclose, and justifiably relied on
JPMorgans nondisclosures to their substantial detriment.
proximate result of JPMorgans fraudulent concealment.
126.! As a direct and proximate result of JPMorgans fraudulent concealment, the
Plaintiff and the other Term Loan participants were unaware of the claims they could assert
against JPMorgan, Mayer Brown, and Simpson Thacher.
127.! Because JPMorgan fraudulently concealed these facts from the Plaintiff and the
other Term Loan participants, Plaintiff and the other Term Loan participants were deprived of
their opportunity under the Term Loan Agreement to instruct JPMorgan as to what action to
take against Mayer Brown, Simpson Thacher, and JPMorgan itself. As a result, JPMorgan had
the obligation, without instructions from a majority of the participants in the Term Loan, to
31
take all reasonable steps to ensure that the statutes of limitations on any claims that could be
asserted against Mayer Brown, Simpson Thacher, and JPMorgan itself would not expire. This
could have included entering into tolling agreements with Mayer Brown, Simpson Thacher,
and JPMorgan itself to preserve any claims that could possibly be extinguished under any
applicable statutes of limitations. Plaintiff does not know if any such tolling agreements have
been executed. Any failure by JPMorgan to meet the obligations described herein constitutes
further damages caused by JPMorgans fraudulent concealment.
128.! If it is found that any of the other claims asserted herein against JPMorgan and
Simpson Thacheror elsewhere against Mayer Brownare untimely due to the expiration of
any applicable statute of limitations, then the damages directly and proximately caused by
JPMorgans fraudulent concealment will include the damages the Plaintiff and the members of
the Class would have recovered from JPMorgan, Simpson Thacher, and Mayer Brown on the
claims found to have been untimely filed.
FOURTH CLAIM FOR RELIEF

Declaratory Relief Against JPMorgan for Common Law Indemnification
130.! The Plaintiff and the other Term Loan participants received disbursements as
purported secured creditors for repayments of principal and interest under the terms of the
Term Loan Agreement.
32
131.! On May 20, 2015, the Motors Liquidation Company Avoidance Trust, as
successor in interest to the Creditors Committee, filed the Amended Complaint in the
Adversary Proceeding.
132.! The Amended Complaint seeks to claw back from Plaintiff and the Term Loan
participants:
a.! the Term Loan interest payments received by Plaintiff and the Term Loan
participants in May 2009; and
b.! the Term Loan principal and interest payments received by Plaintiff and the
Term Loan participants in July 2009 pursuant to the DIP Order.
133.! The basis for the demand for repayment levied against the Plaintiff and the other
Term Loan participants is that they and JPMorgan received payments from the bankruptcy
estates as secured creditors when, in fact, they were unsecured creditors.
134.! The improper payments were caused by JPMorgans wrongful authorization of
the Erroneous Termination Statement in contravention of contractual obligations owed by
JPMorgan to the Plaintiff and the other Term Loan participants.
135.! Despite its obviously wrongful conduct, JPMorgan has failed to assume
responsibility for any repayment of principal or interest that is being sought against the Plaintiff
and the other Term Loan Participants.
136.! Due to the pending lawsuit against the Plaintiff and the other Term Loan
participants for repayment of any principal and interest they have received under the Term
Loan, and because JPMorgans has refused to assume responsibility for such repayment, an
actual controversy exists as to the rights of the Plaintiff and the Term Loan participants to
obtain indemnification from JPMorgan for any repayment of principal, interest, and any other
33
fees or costs that they may be required to make as a result of the pending legal proceeding
against them.
137.! The Plaintiff and the other Term Loan participants have standing to seek a
declaratory judgment from this Court, declaring that due to JPMorgans wrongful and grossly
negligent conduct in authorizing the filing of the Erroneous Termination Statement, JPMorgan
is and will continue to be liable to Plaintiff and the other Term Loan participants for
indemnification of any amounts that Plaintiff and the other Term Loan participants will have to
pay as a result of any resolution or disposition of the legal proceedings before the Bankruptcy
Court.
FIFTH CLAIM FOR RELIEF

Malpractice and Professional Negligence Against Simpson Thacher
139.! Defendant Simpson Thacher assumed professional responsibility for
representing JPMorgan, which was the agent for and representative of the lenders in the
Synthetic Lease and the Term Loan. In connection with the Synthetic Lease Payoff, Simpson
Thacher agreed to exercise its professional skill and talent on behalf of and for the benefit of
JPMorgan. Simpson Thacher had a duty to exercise professional competence and due
professional care in doing so. To the extent that Simpson Thacher had this duty to JPMorgan in
its capacity as agent for Plaintiffs, Simpson Thacher owed the same duty to Plaintiffs.
34
140.! In reviewing the closing checklist, escrow letter, and UCC termination
statements, Simpson Thacher had a duty to JPMorgan, and to Plaintiff and the Class members
as JPMorgans principals, to use due professional care.
141.! Simpson Thacher failed to exercise professional competence and due
professional care by negligently, grossly negligently, and recklessly approving and authorizing
the filing of the Erroneous Termination Statement.
142.! Furthermore, Simpson Thacher failed to conduct proper due diligence and failed
to properly review the closing checklist, escrow letter, and UCC termination statements.
143.! As a direct and proximate result of Simpson Thachers professional negligence
and gross negligence, the Term Loan participants lost substantially all of the security interest
under the Term Loan and thereby suffered damages in an amount to be proven at trial.
SIXTH CLAIM FOR RELIEF

Negligent Misrepresentation Against Simpson Thacher
145.! Defendant Simpson Thacher assumed professional responsibility for
representing JPMorgan, Plaintiff, and the other Term Loan participants with respect to the
transactions alleged herein. In connection with the Synthetic Lease Payoff, Simpson Thacher
agreed to exercise its professional skill and talent on behalf of and for the benefit of JPMorgan,
Plaintiff and the other Term Loan participants. Simpson Thacher had a duty to exercise
professional competence and due professional care in doing so. To the extent that Simpson
35
Thacher had this duty to JPMorgan in its capacity as agent for Plaintiffs, Simpson Thacher also
owed the same duty to Plaintiffs.
146.! Simpson Thacher knew that JPMorgan would rely on its review and approval of
the closing checklist, escrow letter, and UCC termination statements.
147.! Simpson Thacher negligently misrepresented to JPMorgan and Mayer Brown
that the closing checklist, escrow letter, and UCC termination statements for the Synthetic
Lease were fine, when, in fact, they were grossly inaccurate because they contained the
Erroneous Termination Statement, which would, when filed, terminate the security interest for
the $1.5 billion Term Loan.
148.! Simpson Thacher knew that JPMorgan would rely on its representations
regarding the documentation prepared in connection with the Synthetic Lease Payoff.
149.! As a direct, foreseeable, and proximate result of Simpson Thachers negligent
misrepresentations, the Plaintiff and other Term Loan participants lost substantially all of their
security interest under the Term Loan and thereby suffered damages in an amount to be proven
at trial.
PRAYER FOR RELIEF

Plaintiff, on behalf of itself and the Class, respectfully requests:
a.! That that the Court certify this action as a class action pursuant to Federal
Rule of Civil Procedure 23(a) and (b)(1), (2), and (3), appoint Plaintiff as the
representative of the Class, and appoint its counsel as counsel for the Class;
36
b.! That the Court enter judgment awarding actual damages to Plaintiff and the
Class against all of the Defendants in an amount to be proven at trial, as well
as prejudgment and postjudgment interest at the maximum allowable rate;
c.! That the Court award appropriate and reasonable attorneys fees and
expenses and the costs of this suit;
d.! That the Court enter the appropriate declaratory relief to which Plaintiff and
the Class are entitled; and
e.! That the Court award such other and further relief as it may deem just and
proper.
JURY DEMAND
Plaintiff demands a trial by jury on all causes of action so triable.
Dated: July 30, 2015
By:
/s/ Willem F. Jonckheer

WILLEM F. JONCKHEER
Robert C. Schubert
Willem F. Jonckheer
Noah M. Schubert
Kathryn Y. Schubert
SCHUBERT JONCKHEER & KOLBE LLP
Three Embarcadero Ctr Ste 1650
San Francisco, CA 94111
Ph: 415.788.4220
Fx: 415.788.0161
rschubert@schubertlawfirm.com
wjonckheer@schubertlawfirm.com
nschubert@schubertlawfirm.com
kschubert@schubertlawfirm.com
37
Andy Katz
LAW OFFICES OF ANDY KATZ
2150 Allston Way Suite 400
Berkeley, CA 94704
Ph: 510.985.9050
Fx: 510.900.6070
andykatzlaw@gmail.com
Attorneys for Plaintiff and the Putative Class
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Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 1 of 38

UNITED STATES DISTRICT COURT

OAKLAND POLICE AND FIRE

JURY TRIAL DEMANDED

JPMORGAN CHASE BANK, N.A. and

CLASS ACTION COMPLAINT

SUMMARY OF THE ACTION

Retirement System (Plaintiff or PFRS) on behalf of a class of entities that participated in a

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 2 of 38

As a result of the filing of the erroneous termination statement, caused by

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 3 of 38

Defendant JPMorgan is a national banking association that is the principal bank

Defendant Simpson Thacher is a limited liability partnership and law firm

The Defendants JPMorgan and Simpson Thacher are sometimes collectively

referred to herein as the Defendants.

JURISDICTION AND VENUE

This Court has personal jurisdiction over Defendants because Defendants

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 4 of 38

JPMorgan, General Motors, and the Syndicate

In 2006, General Motors, as Borrower, Saturn Corporation, as Guarantor,

Richard W. Duker (Duker), as managing director of JPMorgan, signed the

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 5 of 38

JPMorgan and General Motors Agree to Terminate an Unrelated Borrowing.

In September 2008, General Motors contacted JPMorgan to pay off a separate

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 6 of 38

On October 1, 2008, Gordon instructed his associate, Ryan Green (Green) to

Simpson Thacher Reviewed and Authorized

On October 7, 2008, Green contacted Michael Perlowski (Perlowski), a

Perlowski responded to Greens request by emailing him three effective UCC

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 7 of 38

Mardi Merjian (Merjian), an attorney at Simpson Thacher. Simpson Thacher represented

Checklist attachment to Duker at JPMorgan.

Later on October 15, 2008, Green circulated an updated, but substantially

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 8 of 38

The first line of the Erroneous Termination Statement reads INITIAL

FINANCING STATEMENT FILE #6416808 4 on 11.30.06. (Emphasis added.) The other

the Erroneous Termination Statement), Merjian forwarded the documents to Duker at

Closing Checklist and Erroneous Termination Statement as an attachment, stating:

Merjian provided no further comments to the Closing Checklist or Erroneous

CLASS ACTION COMPLAINT

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 9 of 38

Simpson Thacher Executes Escrow Instructions Authorizing

The Escrow Instructions listed each of the documents to be filed or signed in

comments to the draft escrow letter?

The Escrow Instructions were subsequently signed by Green, as attorney for

General Motors, and Merjian as attorney for JPMorgan.

The Erroneous Termination Statement Is

Gonshorek to file the Erroneous Termination Statement.

On October 30, 2008, Gonshorek caused the Erroneous Termination Statement

No one at JPMorgan, including Duker, ever asked any questions about or

communicated any changes to the Erroneous Termination Statement.

or communicated any changes to the Erroneous Termination Statement.

Case 1:15-cv-06007-UA Document 1 Filed 07/30/15 Page 10 of 38

JPMorgan Breached the Term Loan Agreement by Authorizing

Under Section 10.01(vii) of the Term Loan Agreement, JPMorgan was

In authorizing the filing of the Erroneous Termination Statement, JPMorgan

As a direct and proximate result of JPMorgans breach of the Term Loan