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

In an order dated Thursday, Judge Kaplan required, as a condition of approving a $90 million settlement covered entirely by D&O insurance, that five former Lehman officers (including former CEO Richard Fuld) disclose in camera certain financial information about their net worth.  The information had already been compiled and disclosed to former Southern District Judge John Martin, who assisted with the settlement. Judge Kaplan began his order by quoting Kenny Rogers:
Continue Reading Judge Kaplan Requires Former Lehman Officers to Disclose Net Worth Information Before Approving Settlement

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