Judge halts class action in Countrywide merger
LOS ANGELES (Reuters) - A federal judge in Los Angeles on Friday halted class action claims that sought to stop a merger between Countrywide Financial Corp CFC.N and Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) until similar litigation pending in a Delaware Chancery Court is resolved.
U.S. District Judge Mariana Pfaelzer also rejected a motion by the plaintiffs, led by the Arkansas Teacher Retirement System, to set up a constructive trust to preserve their claims against Countrywide's directors and officers.
The shareholders contend they will lose their legal right after the merger to sue those individuals for allegedly reaping hundreds of millions of dollars from insider trading.
(Reporting by Gina Keating; Editing by Gary Hill)
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