September 27, 2005
A team of Kelley Drye litigators, led by Firm Chairman John Callagy, prevailed in a $20 million lawsuit brought against JP Morgan Chase Bank. The suit was brought in U.S. District Court of the Southern District of New York by bondholders of a complex collateralized debt obligation (“CDO”) transaction. Kelley Drye defended JP Morgan Chase Bank (“JPMC”) against breach of contract, breach of fiduciary duty and negligence claims arising out of JPMC’s role as indenture trustee on the deal. The plaintiff bondholders alleged that the declaration of an event of default was improper, as was the subsequent liquidation, which resulted in losses to the plaintiffs, who were subordinate bondholders. In a series of motions, Kelley Drye successfully argued that plaintiffs could not establish causation and damages as a matter of law. The Court finally agreed and granted JPMC’s summary judgment motion. Plaintiff waived its right to appeal and the Court entered a final order of dismissal.