09 Civ. 02058

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In an order today, Judge Castel explained why, although he approved over $150 million in attorney’s fees in a securities class action against Bank of America, he would not approve a request for $3.4 million from Flanagan, Lieberman, Hoffman and Swain, a firm that apparently played only a peripheral role for the class:
Continue Reading Judge Castel Denies $3.4 Million Fee Request for “Armchair Advice” in Securities Class Action

In the class action alleging that Bank of America’s proxy statement for the Merrill merger failed to disclose massive expected losses at Merrill, the plaintiffs filed on Friday a 102-page omnibus opposition to the series of summary judgment motions we covered previously. In response to the principal defense argument — that any failure to disclose the extent of Merrill’s expected losses was an injury to the company that must be brought, if at all, derivatively — the plaintiffs argued as follows:
Continue Reading Class Action Plaintiffs Contend Bank of America-Merrill Proxy Claims Reflect Direct Shareholder Injury

In a case we have followed closely, the parties to the derivative claims against Bank of America’s directors and officers relating to the Merrill Lynch and Countrywide acquisitions told Judge Castel today that they had executed a definitive settlement agreement, presumably reflecting the $20 million agreement in principle disclosed in April. In an interesting twist, Judge Castel issued an order suggesting that he might delay approval of the deal until after a trial on October 22 on related securities class action claims:
Continue Reading Judge Castel Considers Delaying Approval of Bank of America Derivative Settlement Pending Securities Class Action Trial

A securities class action before Judge Castel accuses Bank of America, Merrill Lynch and certain officers and directors of securities fraud and related violations for failing to disclose, before the shareholder vote to approve the Bank of America-Merrill merger, that Merrill was expecting enormous losses for the fourth quarter of 2008 and that Bank of America and Merrill had agreed to set aside up to $5.8 billion for Merrill bonuses.  The parties today cross-moved for summary judgment. The class plaintiffs (represented by Bernstein Litowitz) moved for partial summary judgment to establish that the pre-merger disclosures about the effect of the deal on earnings were both false and material:
Continue Reading Parties Cross-Move for Summary Judgment Concerning Bank of America-Merrill Merger Disclosure Claims

The proposed settlement of a derivative suit before Judge Castel concerning Bank of America’s acquisitions of Countrywide and Merrill Lynch is being challenged by lawyers in a parallel case in Delaware state court. The parties to the federal case told Judge Castel on April 12 that they had settled. The next day, the Delaware lawyers filed a motion to enjoin the settlement, and Judge Castel signed an order to show cause that set a briefing schedule that will be complete by May 4. The motion papers were not (and still are not) available on ECF, but the grounds for the motion were made clear by a story in the New York Times: the Delaware lawyers contend the settlement amount of $20 million is grossly inadequate because it is a fraction of the $150 million SEC fine from the Merrill merger and because the bank’s insurance policy would result in the defendants paying nothing out of pocket. A Reuters story later provided additional background, including the unusual fact that two parallel derivative actions would proceed for so long without one case or the other being stayed.
Continue Reading Bank of America Derivative Settlement Challenged by Lawyers in Parallel Delaware Action