Thursday, June 21, 2012

Merrill purchase settlement could wait until after October trial

Attorneys in a New York civil suit over Bank of America's 2008 acquisition of Merrill Lynch have reached a definitive agreement to settle some claims, but the federal judge overseeing the case indicated in documents filed Wednesday that he may wait to approve it until after an October trial on related claims.

Both cases deal with the fact that billions of dollars in losses at Merrill Lynch were not disclosed to shareholders in advance of its December vote to acquire the ailing investment bank. Filings in the case earlier this month included sworn testimony from then-Bank of America CEO Ken Lewis that he was aware of the ballooning losses before the shareholder vote.

In April, attorneys in the New York told the judge they had reached an agreement in principle to settle what are known as derivative claims for $20 million. Attorneys in a parallel case in Delaware sought to stop it, calling it inadequate, but were unsuccessful. Presumably, the April announcement is connected to the one this week.

But the judge said that he would likely wait until after a related securities class action case he also oversees goes to trial on Oct. 22 to give the settlement final approval.

Bank of America attorneys have said the Delaware litigants have rebuffed attempts to settle. The Delaware trial is also scheduled to begin Oct. 22.

0 comments: