Dec. 9 (Bloomberg) -- JPMorgan Chase & Co., the largest U.S. bank, owns 40 percent of the shut-down Chicago factory whose workers are blaming Bank of America Corp. for causing the company’s demise.

JPMorgan bought a stake in Republic Windows and Doors LLC in early 2007 through its Chase Capital Partners investment unit, spokesman Tom Kelly said. Chase Capital wrote off the investment and resigned its board seat earlier this year, he said.

“We haven’t been involved since the summer,” Kelly said in an interview today. “We are disappointed to see how the Republic workers are being treated by management.”

Workers have been staging a sit-in at the factory since last week, claiming the company still owes them pay after the nationwide housing slump caused Republic to collapse. They’ve focused their ire on Bank of America for cutting off Republic’s line of credit, and their protest attracted support from President-elect Barack Obama. Bank of America relented today, announcing in a statement that it will extend loans to Republic.

JPMorgan hasn’t discussed the dispute with Bank of America officials, Kelly said. JPMorgan has the largest share of bank deposits in the Chicago area, followed by Bank of America, which acquired LaSalle Bank from ABN Amro NV last year.

Richard Gillman, the majority owner of Republic Windows, couldn’t be reached for comment about the JPMorgan investment, according to Thomas Figel, a Chicago publicist hired to represent the company.

Obama’s Support

The workers’ union has been planning a rally at noon tomorrow at the Bank of America building in downtown Chicago. Obama, whose home is 12 miles from the factory, in Chicago’s Hyde Park neighborhood, said at a Sunday press conference the workers are “absolutely right” to demand severance and vacation pay.

The factory sit-in has become the center of the debate over how more than $700 billion in federal funds are used to help the world’s largest economy weather the worst economic decline since the 1930s. Charlotte, North Carolina-based Bank of America has sold preferred shares worth $15 billion to the U.S. Treasury, while Merrill Lynch & Co., the securities brokerage it is buying, has sold $10 billion. JPMorgan sold $25 billion.

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net

Last Updated: December 9, 2008 20:32 EST