Bank of America Corp. directors’ $20 million settlement of
investor lawsuits alleging the bank overpaid when it bought Merrill Lynch &
Co. amounts to just 4 percent of the board’s $500 million in insurance coverage
and is inadequate, lawyers objecting to the accord told Bloomberg.
Attorneys for Bank of America shareholders suing in Delaware
over the $50 billion acquisition of Merrill Lynch have asked a judge in that
state to keep their claims alive even though a federal judge in New York is
considering a $20 million settlement of almost identical suits brought by other
bank investors. If that accord is approved, it could wipe out the Delaware
claims.
“The proposed
settlement is grossly inadequate and represents only 0.4 percent of the value
of the $5 billion derivative claims that the Delaware Derivative Plaintiffs
have been vigorously pursuing,” lawyers for the Delaware investors said in a
Delaware Chancery Court filing late yesterday. The settlement also amounts to
“only 4 percent” of available insurance, they said.
In case you were wondering how much moolah is at stake....the total amount of insurance coverage for directors of
Charlotte, North Carolina-based Bank of America, the second- largest U.S. bank,
was blacked out of the filing. Bloomberg News’s calculations show the total is
$500 million…..
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