Last witness testifies against $8.5 billion BofA deal
By Karen Freifeld
NEW YORK (Reuters) - An expert witness testified on Thursday that Bank of America Corp's (BAC.N: Quote) proposed $8.5 billion settlement with mortgage bond investors is "not reasonable" and rife with conflicts of interest, as opponents made a final push to derail the deal.
Adam Levitin, a law professor at Georgetown University in Washington, is the last scheduled witness in a long-running case over whether the deal should be approved.
"My opinion is the settlement was not entered into in good faith," Levitin said in state court in New York.
Bank of America agreed to the deal in June 2011 to resolve claims over shoddy mortgage-backed securities issued by Countrywide Financial Corp. in the run-up to the financial crisis. Bank of America bought Countrywide in 2008.
Twenty-two institutional investors, including BlackRock Inc, MetLife Inc MET.N and Allianz SE's (ALVG.DE: Quote) Pacific Investment Management Co sign onto the accord.
Opponents led by insurance company American International Group Inc (AIG.N: Quote) accuse Bank of New York Mellon Corp (BK.N: Quote), the trustee overseeing the securities, of placing its interests above those of bondholders by entering into the settlement.
The proceeding, which began in New York State Supreme Court in June before Justice Barbara Kapnick, has been in recess since late September.
Testifying for the objectors who resumed their case on Thursday, Levitin said that BNY Mellon had an incentive to "curry favor" with Bank of America because "that's where it's going to get its business from." Continued...