BofA Keeps Its In-House Counsel Busy
If you are in-house counsel at Bank of America, you likely find your plate pretty full these days. And that's thanks to a couple of big August BofA settlements and a case that's headed to state court.
Bank of America agreed earlier this month to a $55 million settlement to put an end to claims of former employees of the BofA-acquired Countrywide Financial Corp. The class action suit claimed that Countrywide breached an obligation to manage the former employees' funds properly.
The settlement promises approximately $1000 before legal fees, for each of the 55,000 employees taken into account. Countrywide, which was at one time the country's leading mortgage lender, was acquired by Bank of America last year when it faced cash flow problems. BofA in turn inherited rising claims from former Countrywide employees of risky, imprudent actions taken by directors and officers of the lender.
The settlement also quells another set of retirement-related claims against two-dozen former board members of Countrywide.
Bank of America cites avoiding litigation as its impetus for the settlement. And it's not the first time this month that BofA has had to agreed to a sizeable payout. It kicked off August with an agreement to pay a $33 million penalty to settle government charges that it misled investors.
And if you thought August felt long, for BofA's legal team, the month is hardly over. Bank of America
is also preparing to argue a case in state court brought against Countrywide by
Greenwich Financial Services Fund seeking to force Countrywide to buy back
mortgages sold to trusts.