Approval of $8.5 billion BofA settlement in judge's hands
By Karen Freifeld
NEW YORK (Reuters) - A decision on whether to approve Bank of America Corp's proposed $8.5 billion settlement with investors in mortgage securities is now in the hands of a New York state judge, after a nine-week court proceeding ended on Thursday.
Justice Barbara Kapnick, of New York state Supreme Court in Manhattan, must decide whether it was reasonable for Bank of New York Mellon Corp, as trustee for the securities, to enter into the settlement, which is binding on investors.
The judge gave no indication when she might rule. Decisions in New York state courts can take weeks or even months.
Bank of America agreed to the deal in June 2011 to resolve claims over toxic mortgage-backed securities issued by Countrywide Financial, which Bank of America bought in 2008.
A group of 22 institutional investors, including BlackRock Inc, Metlife Inc, and Allianz SE's Pacific Investment Management Co (Pimco) took part in the negotiations.
Objectors to the settlement have been led by American International Group Inc (AIG), which has argued the process was flawed and that there is no proof the settlement adequately compensates bondholders.
New York attorney Hector Gonzalez, of Dechert, who represents Bank of New York Mellon, got in the last word on Thursday.
"The settlement looks even better for the trusts today than it did in June 2011," Gonzalez said, given the housing recovery and court rulings that make it likely that Bank of America would not be held responsible for Countrywide's liabilities. Continued...