American International Group, Inc. (AIG) Slams Bank of America Corp (BAC) at Settlement Hearing

How does it look for B of A?
While Ingber’s arguments certainly help explain why BONY made the decisions it did back in 2011, the fact remains that much of the basis for that decision is no longer applicable. The New York venue will clearly make issues of successor liability less of a slam-dunk for Bank of America Corp (NYSE:BAC), and legal rulings made since the original deal was struck obviously lessen the likelihood that the investors will be required to prove the source of their losses.

As for American International Group, Inc. (NYSE:AIG)’s allegations, counsel representing the other investors said there was no collusion, but also noted that taking the deal was preferable to taking a chance that B of A would allow Countrywide to go bankrupt. This, apparently, was a real concern  — one brought out by B of A’s own Chief Risk Officer back in 2011. Put that way, the decision to settle looks more conflicted — and at the same time, calls the appropriateness of the agreed-upon $8.5 billion into question, particularly when counsel for the non-objectors noted that $32 billion was the number floated to represent investor losses at the time of the original negotiations.

Judge Kapnick has acknowledged that this case won’t be settled by the end of this month, so much more information will be forthcoming in the next few weeks. So far, though, none of it is looking terribly promising for Bank of America Corp (NYSE:BAC), or regarding the solidity of the agreement in question.

The article AIG Slams Bank of America at Settlement Hearing originally appeared on Fool.com.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends American International Group, Inc. (NYSE:AIG) and BlackRock, Inc. (NYSE:BLK). The Motley Fool owns shares of American International Group and Bank of America Corp (NYSE:BAC) and has the following options: Long Jan 2014 $25 Calls on American International Group.

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