US Court Refuses To Delay Bank of America Corp, Merrill Settlement Case-Reuters

Reuters reported that a U.S. federal judge in New York on Monday refused to delay the approval process for a controversial $20 million settlement between Bank of America Corp Directors and shareholders who accused the bank of overpaying for Merrill Lynch & Co. U.S. District Judge Kevin Castel rejected as premature a request by another shareholder group, pursuing a similar lawsuit against Bank of America directors, to intervene in the New York case. The second group of shareholders, who have taken action in the Delaware Chancery Court, say the New York settlement is too low and could erase its claims. Bank of America agreed to buy Merrill on September 15, 2008, at the height of the financial crisis. Merrill's losses were a factor in the bank being forced to obtain a second federal bailout, and contributed to a 93% drop in its share price over six months. The takeover closed in January 2009. The second shareholder group has complained that the New York settlement was the result of a 'collusive scheme' between Directors trying to avoid a big payout and lawyers hoping to win a big fee award. They also said the payout is too low in light of the damages suffered and $500 million of insurance coverage available to the directors.