Bank of America Corp agreed to pay US$62.5 million to resolve investor claims that the bank’s directors mishandled the acquisition of Merrill Lynch & Co, company officials said.
US District Judge Kevin Castel in New York on Friday approved Bank of America’s offer to add US$42.5 million to a US$20 million settlement of shareholder lawsuits alleging the bank’s board allowed executives to overpay for Merrill Lynch in 2009.
Castel indicated in a Jan. 4 order he had questions about the “fairness, reasonableness and adequacy” of the original accord, according to court filings.
“We supported the terms of the settlement and we are gratified that the matter has been resolved,” Bank of America spokesman Lawrence Grayson said in a telephone interview on Friday.
Resolution of the claims against Bank of America’s board clears the way for Castel to focus on whether to bless a more than US$2.4 billion settlement of other investors’ securities- fraud claims over the Merrill Lynch deal.
The shareholders claimed former chief executive officer Kenneth Lewis and other board members misled them about the losses Merrill Lynch incurred before the US$18.5 billion buyout and should have pulled the plug on the deal.
New York-based Merrill Lynch, founded by Charles Merrill in 1914, suffered at least US$50 billion in losses and writedowns linked to the collapse of the US subprime mortgage market before agreeing to the sale.
Castel raised questions about the original US$20 million settlement of Bank of America shareholders’ claims against Lewis and other directors after investors who had sued in Delaware over the handling of the Merrill Lynch deal challenged it.
They argued that the accord amounted to just 4 percent of the US$500 million in insurance Bank of America bought to cover directors and less than 1 percent of the more than US$2.4 billion it agreed to resolve securities-fraud claims over the Merrill buyout. The settlement also would wipe out the Delaware claims, they said.
The US$20 million settlement also amounted to about 13 percent of the US$150 million fine the US Securities and Exchange Commission (SEC) levied against Bank of America in 2010 over the Merrill Lynch purchase.
The SEC accused Bank of America in August 2009 of failing to disclose to investors it had agreed to let Merrill Lynch pay as much as US$5.8 billion in employee bonuses and incentives.
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The US$410 DeliSofter pot looks much like the rice cookers ubiquitous in Japanese households and it does prepare rice in 24 minutes. However, this invention of two Panasonic Corp engineers is designed to do more and help people with swallowing difficulties. The two women led the creation of a spin-off company, Gifmo Co, to sell the specialized steam cooker, which they say can turn fried chicken soft enough to be sliced with a potato chip. The machine works by first cutting into food with a series of blades and then subjecting it to extremely high pressure at a temperature of 120°C,
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