Northern, WI 04/16/2013 (usastockreport) – A judge has ruled that the bond insurer, Assured Guaranty Municipal Corp. cannot proceed with the lawsuit that it has filed against JPMorgan Chase & Co (NYSE:JPM) (Closed: $47.93, down by 2.20%) as it would be an interference with the reorganization of Alabama’s Jefferson county which is the United States’ largest biggest municipal bankruptcy. Judge Thomas B. Bennett of the U.S Bankruptcy court in Birmingham, Alabama has found that the circumstances, facts and lawyers of the case that Assured has against JP Morgan are similar to a case that has been filed against Jefferson County by Suncor Holdings Ltd (PINK:SYCRF) (Closed: $0.390, Down by 12.36%).
In this case, Assured hadn’t named the country and so the argument by the insurer is that the case should proceed. Bennett ruled that that equality of treatment is necessitated by the similarity in facts between Assured’s case and the Syncora case. In 2011, Jefferson County had filed for bankruptcy protection from creditors. The country had blamed the loss of tax related to businesses as well as over $3 billion just in warrants that couldn’t be repaid by the sewage system. The minute a municipality enters bankruptcy all lawsuits that have been filed against it are temporarily stalled.
Some of the sewer warrants had been insured by Assured and Syncora. In their respective lawsuits, both the companies argued that the insurance policies had been written only because fraud had been committed by the county and the underwriter of the warrants, JP Morgan.