| Racepoint Partners, LLC v JPMorgan Chase Bank, N.A. |
| 2008 NY Slip Op 10034 [57 AD3d 378] |
| December 23, 2008 |
| Appellate Division, First Department |
| Racepoint Partners, LLC, et al., Respondents, v JPMorganChase Bank, N.A., Appellant. |
—[*1] Bartlit Beck Herman Palenchar & Scott LLP, Chicago, Ill. (James B. Heaton, III, of theIllinois bar, admitted pro hac vice, of counsel), for respondents.
Order, Supreme Court, New York County (Karla Moskowitz, J.), entered November 9, 2007,which denied defendant's motion to dismiss the complaint, unanimously reversed, on the law,with costs, the motion granted and the complaint dismissed. The Clerk is directed to enterjudgment accordingly.
After the December 2, 2001 bankruptcy filing by Enron Corporation, plaintiffs purchasedcertain notes issued by Enron. In this action, plaintiffs assert breach of contract and fiduciaryduty claims against JPMorgan Chase Bank, N.A., which had served as indenture trustee for thenotes. Plaintiffs' claims, which allege acts or omissions by JPMorgan occurring before plaintiffspurchased the notes, are predicated on section 4.02 of the indenture agreement. In relevant part,section 4.02 required Enron to "file with the Trustee, within 15 days after it files the same withthe SEC, copies of its annual reports and of the information, documents and other reports. . . which [Enron] is required to file with the SEC pursuant to Section 13 or 15 (d)of the [Securities] Exchange Act [of 1934, as amended]."
When read in light of the entire indenture agreement and, in particular, the provision ofsection 4.02 stating that the "[d]elivery of such reports, information and documents to the Trusteeis for information purposes only," section 4.02 merely required Enron to file with the indenturetrustee copies of the information, documents and other reports it filed with the Securities andExchange Commission. Thus, contrary to plaintiffs' contentions, section 4.02 did not requireEnron to file with the indenture trustee financial statements the contents of which comply withfederal securities law. Because there was neither a default by Enron nor an event of default underthe indenture agreement, the [*2]breach of contract cause ofaction must be dismissed. As plaintiffs concede, the dismissal of the contract cause of action isfatal to the breach of fiduciary duty cause of action. Concur—Friedman, J.P., McGuire,Acosta, DeGrasse and Freedman, JJ.