NEW YORK – A recently proposed $20 million settlement of shareholder claims by Bank of America Corp. over its 2009 acquisition of Merrill Lynch is being challenged by a separate group of shareholders as too small.
A federal judge in New York has ordered the Bank of America directors who were sued over the deal to defend the settlement in court on May 4, along with the lead shareholders they settled with: Louisiana Municipal Police Employees Retirement System and Hollywood Police Officers’ Retirement.
The court order came last week in response to a request by lawyers for the second group of shareholders, who have their own similar lawsuit pending against Bank of America’s board in Delaware Chancery Court.
At issue for both groups is the bank’s purchase of Merrill Lynch at the height of the financial crisis.
The $20 billion takeover deal was forged on the same September 2008 weekend that Lehman Brothers collapsed. The deal came into question later after Bank of America disclosed that Merrill would post $27.6 billion in losses that year. That added significantly to Bank of America’s financial woes and bailout request.