BofA has over $100 billion in mortgage liabilities, says Chris Whalen Co-founder of Institutional Risk Analytics. On a web broadcast published on KingWorldNews, he advocates "the classical American way of dealing with this problem"-- complete and total restructuring through Chapter 11. Before its too late.
He says, "The only sane way of fixing this and I mean fix it so that BofA comes out of the process restructured, ready to support growth, support leverage, is a classic chapter 11..."
His point: Countrywide's bond trusts are worthless, were never properly constructed, and don't protect investors at all. BofA is on the hook for all of that, and while its subsidiaries are well capitalized, the parent company is bust. The only thing to do to fix this problem is to unmake $100s of billions worth of bond contracts.
BofA can't take that strain as is because it can't touch any subsidiary money to settle its legal claims, so equity holders are going to get screwed over...
Read more at http://www.businessinsider.com/chris-whalen-says-bank-of-america-should-declare-bankruptcy-2011-9
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