Overview
In a case we have followed closely, the parties to the derivative claims against Bank of America’s directors and officers relating to the Merrill Lynch and Countrywide acquisitions told Judge Castel today that they had executed a definitive settlement agreement, presumably reflecting the $20 million agreement in principle disclosed in April. In an interesting twist, Judge Castel issued an order suggesting that he might delay approval of the deal until after a trial on October 22 on related securities class action claims:
Ordinarily, there is about a 90-day interval between an order granting preliminary approval and the hearing on final approval to enable notice to be given and objections received. The parties should be aware that, if the Court grants preliminary approval, it is contemplating conducting the final settlement hearing after the conclusion of the trial of the Consolidated Securities Class Action, which will commence on October 22,2012. The reasons are several: first, there is a serious issue presented in the pending summary judgment motions in the Consolidated Securities Class Action whether certain types of damages are properly recoverable in the derivative action or in the securities action and deferring the issue will prevent any whipsawing on this issue; second, the issue of available Directors & Officers liability coverage will be clarified, given that both the derivative and securities actions are likely drawing on the same pool of coverage; and third, the Court will have a better understanding of the underlying facts after having presided at the securities trial.
