| NEW YORK
NEW YORK Jan 17 The New York judge weighing
approval of Bank of America Corp's $8.5 billion
settlement with investors in mortgage securities was promoted on
Friday, but is expected to rule on the controversial accord
before she takes her new job.
Justice Barbara Kapnick of the New York State Supreme Court
in Manhattan, who heard nine weeks of testimony about the
fairness of one of the biggest settlements stemming from the
2008 financial crisis, was appointed to the state's Appellate
Division, an intermediate appeals court, by Governor Andrew
Bank of America had agreed in June 2011 to the $8.5 billion
settlement to resolve claims over roughly $174 billion of
mortgage-backed securities issued by the former Countrywide
Financial Corp, which the bank had bought three years earlier.
The settlement was intended to resolve much of the
Charlotte, North Carolina-based bank's legal liability from
Countrywide. It was backed by 22 institutional investors
including BlackRock Inc, MetLife Inc and Allianz
SE's Pacific Investment Management Co.
But investors led by American International Group Inc
objected, saying there was no proof the payouts were
fair, and that Bank of New York Mellon Corp failed to
perform its duties as trustee during the negotiations.
Kapnick had overseen a so-called Article 77 proceeding,
which ended on Nov. 21, to determine whether the settlement
should be approved. She has yet to rule.
A staff member in Kapnick's chambers said in an interview
after the promotion was announced that "the judge is going to be
issuing that decision before she leaves."
David Bookstaver, a spokesman for the New York state court
system, said it is unclear when the promotion will take effect,
but that state law appeared to allow promomoted judges to decide
cases they were already handling that were ready for rulings.
Kathy Patrick, a lawyer for the institutional investors,
said: "New York law permits Judge Kapnick to rule on this
matter, and we look forward to her decision."
Bank of America spokesman Lawrence Grayson declined to
comment. A Bank of New York Mellon spokesman had no immediate
comment. An AIG spokesman could not immediately be reached for
Kapnick, 60, will fill a vacancy on the Appellate Division
for the First Department, which encompasses Manhattan and the
Bronx. Her promotion does not require voter or legislative
The judge was elected to the Supreme Court, which in New
York is a trial court, in 2001, and moved to its commercial
division in 2008. She graduated from Barnard College in 1975 and
Boston University School of Law in 1980.
Cuomo on Friday also appointed three trial judges - Colleen
Duffy, Hector LaSalle and Joseph Maltese - to fill vacancies in
the Appellate Division for the Second Department, which
encompasses 10 counties in southeastern New York, including the
other New York City boroughs and Long Island.
The case is In re: Bank of New York Mellon, New York State
Supreme Court, New York County, No. 651786/2011.