NEW YORK, March 1 The Federal Reserve Bank of
New York this week made public its crisis-era settlement with
Bank of America in order to bolster its case against
American International Group Inc over
On Thursday, the New York Fed submitted to a Los Angeles
federal court the settlement in which its Maiden Lane II unit
said it intended to receive all litigation claims associated
with securities it acquired when it bailed out insurer AIG in
The settlement showed that Bank of America agreed to pay the
New York Fed unit $43 million related to some of the residential
The ongoing dispute, however, involves far larger amounts.
It concerns whether AIG transferred $18 billion of litigation
claims to Maiden Lane II, which the New York Fed created in
December 2008 to buy the securities from the giant U.S. insurer.
Earlier this week, a federal judge in New York put AIG's
dispute with the New York Fed on hold while the Los Angeles
court addresses the insurer's separate $10 billion lawsuit
against Bank of America.
AIG is trying to recoup losses from the bank. On Jan. 11, it
sued for a court declaration that it had not transferred those
claims to Maiden Lane, including more than $7 billion in the
Bank of America case.
The New York Fed rejects AIG's claim. The settlement it
submitted on Thursday showed that when it agreed to purchase the
troubled assets from Bank of America, it understood that it was
acquiring all "right, title and interest" in them.
"Maiden Lane's intent was to receive all transferable and
assignable benefits associated with the securities and related
instruments, including litigation claims associated with those
securities or their acquisition by AIG," the settlement said.