Bank Of America Shareholders Say $20 Million Settlement Is Too Small

NEW YORK (AP) — A recently proposed $20 million settlement of shareholder claims by Bank of America Corp. over its 2009 acquisition of Merrill Lynch is being challenged by a separate group of shareholders as too small.

A federal judge in New York has ordered the Bank of America directors who were sued over the deal to defend the settlement in court on May 4, along with the lead shareholders they settled with.

The court order by U.S. District Judge Kevin Castel came last week in response to a request by lawyers for the second group of shareholders, who have their own, similar lawsuit pending against Bank of America's board in Delaware Chancery Court.

Castel directed the board members and the lead plaintiffs in the New York case — Bank of America shareholders Louisiana Municipal Police Employees Retirement System and Hollywood Police Officers' Retirement — to appear before him to defend the proposed settlement.

Bank of America, which is based in Charlotte, N.C., declined comment Saturday.

At issue for both shareholder groups is the bank's purchase of Merrill Lynch at the height of the financial crisis.

The $20 billion takeover deal was forged on the same September 2008 weekend that Lehman Brothers collapsed. The deal came into question later after Bank of America disclosed that Merrill would post $27.6 billion in losses that year. That added significantly to Bank of America's financial woes, and the company subsequently asked for a $20 billion bailout from the government to help offset those losses, on top of the $25 billion it had already received. It has since repaid all $45 billion.

The New York Times reported Friday that the Delaware plaintiffs objected to the April 12 settlement in New York as inadequate. The specifics of the Delaware group's request were not available on the federal court's website Saturday.

Comments

[PunkIntellect]

04:25 PM on 04/23/2012

NICE! Between Judge Rakoff, Citi and this, perhaps the Wall St. fatcats who stole our money will pay (at least a little bit). They *should* be convicted or even charged, but since Obama is "The Bankers' President", I'm not holding my breath.

[smo1111]

12:36 PM on 04/23/2012

Dump the Big Banks..............enjoy the peace of mind.

[Craig Bovia]

11:00 AM on 04/23/2012

Big American Banks and Walls Street are the biggest thieves in the World. After the '29 Crash, we created the SEC and put the Prince of Churning, and one of Wall Streets most accomplished thieves as it's head. Joe Kennedy. Today, we test to find the most incompetent, hire them and send them out to investigate what they can' t begin to comprehend. The World doesn't hate America. They hate the Capitalist Pigs that own and run America. And I second the motion.

[vinyl1]

10:32 AM on 04/23/2012

It is highly likely that the government put pressure on them to acquire Merrill. They agreed not to mention this, but if they are pressed it will all come out.

Anyway, Merrill has turned out to be their most profitable business, so the acquisition was not that bad.

[Aneesia]

08:25 AM on 04/23/2012

It's time to crucify the bankers that helped wreck our economy !

[jistinnkees]

10:59 AM on 04/23/2012

and the politicians.

[Craig Bovia]

11:02 AM on 04/23/2012

Only if they are "of color". White thieves are given mansions and golden parachutes.

[Aneesia]

04:17 PM on 04/23/2012

I agree %100. Members of Congress should be imprisoned for what they have done to America for their corporate bribes....and......the thieves in the Banks are glorified for their contributions to financial rape of the people !

[JavaManiac]

04:27 AM on 04/23/2012

Take it to court. It would be interesting to see what really happened behind closed doors. Who got paid, who won and why they won.

[UCBAlum]

01:08 AM on 04/23/2012

Next time I get a speeding ticket, I want my fine to be as proportional as all the fines banks have paid over the past three years for their role in the financial/housing crisis.

Judging from the ratio of culpability to fines, I should pay about three dollars for anything under 100 mph on the highway, and maybe five bucks if I'm caught driving faster. Then, I want the government to praise my driving abilities, beg me to keep driving, and tell the world they hate having to charge me that fine for reckless driving because I am simply too important not to be out driving on your streets.

Hell, since the government loves me so much I may as well have a drink while I'm at it.

[Craig Bovia]

11:03 AM on 04/23/2012

Cheers!!!
F/F

[jorg1776]

09:22 PM on 04/22/2012

"the company subsequently asked for a $20 billion bailout from the government to help offset those losses, on top of the $25 billion it had already received. It has since repaid all $45 billion."

From what I understand this is not exactly true. They borrowed at a low interest rate then bought bonds at a higher interest rate and therefor actually made a heafty proffit while kicking people out of their homes. Same for all the other large banks.

[Phed Up]

09:09 PM on 04/22/2012

BofA along with Cit and Chase stink big time! Anyone still banking with these banksters needs to get to their local Credit Union or small town bank ASAP! Quit giving these crooks any or your money you sillies!

[jorg1776]

09:20 PM on 04/22/2012

Of course if no small banks or credit unions in your area survived the housing crisis you are kindda skrewd.

[gopgotnosoul]

12:12 AM on 04/23/2012

Most of the smaller banks and credit unions did better than the larger banks caught up in selling sub prime garbage possibly because they weren't spending all their time figuring out how to get more for less like the big banks were. Noting how small banks and credit unions received no bail out money and still did well should tell you something about their business model as opposed to the criminal enterprise the big banks turned themselves into.

[Lindeen]

01:41 AM on 04/23/2012

There's always online banking. Would be worth it to keep from supporting those crooks.

[NOSOCIALNETS]

07:49 PM on 04/22/2012

I have a letter, in my possession, pertaining to the LAST lawsuit re: Countrywide. The letter informed me that I did not own sufficient stock shares to get the lousy $20 which was to be the minimum payout. I wanted that $20 dollars.

Anyway, I took a magazine home from the lobby of my local BAC. So I guess I am even.

[wtf is this]

08:03 PM on 04/22/2012

Hmmm.... minimum payout? guess you're not worthy of even the minimum.
Enjoy the magazine. Hope you took your money out too.

[Mike Rock]

07:37 PM on 04/22/2012

they're right - it's NOT enough - the executives' heads should be on pikes

[John Plock]

06:48 PM on 04/22/2012

this settlement amount is simply nuisance money compared with the fraud that they committed. Hopefully the judge that is calling in BoA and the settling plaintiffs will have the balls to tell them he won't approve the settlement and that they have to go back to the drawing board, and that his holding a hearing isn't simply for show.

[BeerLover]

06:03 PM on 04/22/2012

Oh look! The execs chipped in a little bit from each of their Xmas bonuses to pay off the settlement. No doubt they'll get it back in the NEXT bonus round.

[Django48]

05:27 PM on 04/22/2012

Forget jail. This will not stop until shareholders can go after the personal assets of the corporate managers responsible for such outrages.

[RLaitres]

08:22 PM on 04/22/2012

Not a legal expert, I do not know if they can go after the assets of the Executives and managers in a "pull back" move, but they certainly can go after the members of many Boards of Directors, for neglecting to oversee that the organization was properly operated and managed as they are the ones who should have been representing the interests of the shareholders. With the large failures which happended in 2008 and 2009, there were all too many directors who claimed ignorance and "It's wasn't my responsibility" to watch what management was doing, even though many of them were charged with overseeing the financial affairs of the organization and with PhD's in finance, economics and degree upon degree in management. So, the question is, what were they doing in those positions?

[Django48]

10:11 AM on 04/23/2012

They appoint one another to each other's boards and scratch each other's backs. There is an interlocking overclass of corporate insiders who control the American economy and run things for their own benefit, to the detriment of everyone else.

[Steven Covey]

05:07 PM on 04/22/2012

Where does the money come from to repay the 45 Billion they were bailed out , it was borrowed from the Fed at about 0% interest. It is repaid eventually from all of the fees and interest they will charge their customers...... Move your money to Credit Unions and Local Banks!

[Bklyntaco]

05:30 PM on 04/22/2012

Exactly. These people who defend banks are unbelievable. A paltry 20 million from a bank tyrant that earns BILLIONS every year? That's not justice, it's an insult.

[jorg1776]

09:25 PM on 04/22/2012

actually it was repaid from the dividends of high interest bonds they bought so basically the governmet just outright gave them the money and paid them to take it.