Bank of America Corp. agreed to pay $62.5 million to resolve investor claims that the bank’s directors mishandled the acquisition of Merrill Lynch & Co., company officials said.
U.S. District Judge Kevin Castel in New York Friday approved Bank of America’s offer to add $42.5 million to a $20 million settlement of shareholder lawsuits alleging the bank’s board allowed executives to overpay for Merrill Lynch in 2009. Castell 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,” Lawrence Grayson, a Bank of America spokesman, said in a telephone interview.
Resolution of the claims against Bank of America’s board clears the way for Castell to focus on whether to bless a more than $2.4 billion settlement of other investors’ securities-fraud claims over the Merrill Lynch deal.
The shareholders claimed former Chief Executive Officer Kenneth D. Lewis and other board members misled them about the losses Merrill Lynch incurred before the $18.5 billion buyout and should have pulled the plug on the deal.
The case is In re Bank of America Securities, Derivative and Employee Retirement Income Securities Act litigation, 09-02058, U.S. District Court, Southern District of New York (Manhattan.)
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