BofA director settlement over Merrill triples to $62.5 million: source

Sat Jan 12, 2013 1:08pm EST
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By Jonathan Stempel

(Reuters) - Bank of America Corp (BAC.N: Quote) directors have reached a $62.5 million settlement to resolve investor claims over the bank's acquisition of Merrill Lynch & Co, a person familiar with the matter said, after a federal judge expressed reservations about an earlier version of the accord.

U.S. District Judge Kevin Castel in Manhattan on Friday agreed to increase the size of the settlement from $20 million, the person said.

This came after Castel had indicated in a January 4 order that he had yet to be persuaded of the fairness of the settlement, which also includes governance reforms.

Castel also suggested in that order that "some, most or all" of the $20 million cash payout would have been consumed by attorney's fees for the plaintiffs.

The accord is separate from a $2.4 billion settlement that the Charlotte, North Carolina-based lender reached in September to resolve securities fraud litigation over the Merrill takeover.

Bank of America said in a statement about Friday's developments: "We support the terms of the settlement, and are gratified that the matter has been resolved."

The case was led by two pension funds, the Louisiana Municipal Police Employees' Retirement System and the Hollywood Police Officers' Retirement System in Florida.

Albert Myers and Joseph White, who represent the pension funds, did not immediately respond to requests for comment.   Continued...

The logo of the Bank of America is pictured atop the Bank of America building in downtown Los Angeles November 17, 2011. REUTERS/Fred Prouser