JPMorgan is in a little bit of trouble right now. The company and the law offices of Simpson Thacher & Bartlett LLP are being sued by one of its participants in a $1.5 billion term loan that was made to General Motors Corp. before it went bankrupt. The plaintiffs state that a mistake in the contract eliminated the security interest that would have paid the loan completely, regardless of GM’s bankruptcy in 2009. This mistake left the participants liable to pay off the loan after GM collapsed.  The mistake was made by an associate at Mayer Brown LLP, but was never caught by associates at either JPMorgan or Simpson Thacher.

Among the complainants is the Employees’ Retirement System of the City of Montgomery, Alabama. On July 30, they filed a class action in federal court in Manhattan against Simpson Thacher and JPMorgan. The organization will represent at least 400 participants in the term loan. The plaintiffs claim that the bank never notified them about any contract errors. The retirement center states that is was not made aware of the mistake until May after it was sued to recover payments for the loan.

The retirement system is claiming a breach of contract and is suing Simpson Thacher for malpractice. JPMorgan is refusing to comment on the lawsuit at this time. Simpson Thacher is also declining to comment at this time.

Individuals seeking loans do not have to rely on the authority or generosity of traditional banks. As demonstrated by this latest news, even attaining loans from trusted lenders can be risky. I you need a loan to start a small business, there are legitimate, short term alternatives that won’t send you scrambling when repayment is due. First American Merchant is an online merchant cash advance company that provides small business cash advances. Our merchants provide flexible programs that give merchants access to loans in less than 72 hours. There are no financial records or tax returns required, plus there are short term small loan options available.

Contact us now to start your application

Get Started Now