A "clerical error" could cost Bank of America and Citibank $51m (£35m) if Heller Ehrman has its way in bankruptcy court. Bank of America, acting for itself and as an agent of Citibank, terminated both institutions' security interests in Heller on 3 August, 2007, according to public records from the California Secretary of State. The banks admit they made a mistake and want to be considered secured creditors, but courts have not looked kindly on similar errors in the past. A secured creditor must "perfect" its security interests with uniform commercial code filings and file updates every five years. The bank last submitted such a continuation in 2005, so another filing was not needed until 2010. On 1 October 2008, a week after Heller said it would dissolve, the bank filed a correction statement saying the 2007 filing was a "clerical error." On Monday, the bank declined to discuss how or why the error occurred, or who made it - the 2007 filing required no signature.
January 06, 2009 at 06:02 AM
1 minute read
The original version of this story was published on Legalweek
A “clerical error” could cost Bank of America and Citibank $51m (£35m) if Heller Ehrman has its way in bankruptcy court, reports The Recorder.
Bank of America, acting for itself and as an agent of Citibank, terminated both institutions’ security interests in Heller on 3 August, 2007, according to public records from the California Secretary of State. The banks admit they made a mistake and want to be considered secured creditors, but courts have not looked kindly on similar errors in the past.
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