April 23, 2012
Another BofA settlement is challenged
Lawsuit between Bank of America and two pension funds involve Bank of America's purchase of Merrill Lynch during the height of the financial crisis. (UPI/Alexis C. Glenn)
NEW YORK (UPI) -- A settlement over a class-action lawsuit between Bank of America and two pension funds is being challenged by lawyers in another case, court papers say.
Bank of America is reportedly settling the case with Louisiana Municipal Police Employees' Retirement System and the Hollywood (Florida) Police Officers' Retirement System for $20 million, The New York Times reported Saturday.
But lawyers for plaintiffs in a similar case in Delaware are saying the damages go as high as $5 billion. The New York case, essentially, is being settled safely, within the boundaries of BofA's insurance policies.
The settlement would also eliminate any settlement in the Delaware case, the Times said.
The lawsuits involve Bank of America's purchase of Merrill Lynch during the height of the financial crisis.
The case has already gone through federal courts. The Securities and Exchange Commission reached a settlement of $33 million on the matter, which federal Judge Jed Rakoff refused to sign.
Rakoff challenged that settlement saying it was a slap on the wrist and would end up punishing shareholders, rather than those who made the decision to withhold information that should have been made available to shareholders when BofA bought Merrill Lynch.
That would have made the shareholders victims twice, Rakoff said at the time.
Rakoff later agreed to a settlement of $150 million in that case.
In the current challenge of the New York settlement, court papers say lawyers for the pension funds have done little to make their case, deposing only two of BofA's 16 board members.
In Delaware, lawyers have filed 48 depositions, having deposed all 16 of the bank's directors, the Times reported.