Bank of America Corporation : Merger with Merrill Lynch Summary: According to the press release dated January 21, 2009, the facts underlying this action concern the Merger of Bank of America and Merrill Lynch, which closed on January 1, 2009. The complaint alleges that on January 16, 2009, Bank of America disclosed Merrill Lynch's preliminary 2008 fourth quarter loss of $15.3 billion. Merrill Lynch's fourth quarter 2008 "principal transactions" revenue was negative $13.1 billion, reflecting a net loss owing to write-downs, mark-to-market valuation declines and other losses on assets held in its trading portfolio.
It is alleged that as a result of this massive loss Bank of America was compelled to seek additional funding and asset guarantees from the United States Treasury Department. Following these disclosures, Bank of America shares declined by 31% between January 14, 2009 and January 16, 2009.
The complaint charges that the Proxy Statement contained material misrepresentations and failed to disclose facts necessary to make the disclosures true. Specifically, defendants' misrepresentations and omissions include the failure to update, amend or correct the Proxy Statement to reflect, among other things, the risk or existence of Merrill Lynch's fourth quarter losses, prior to the December 5, 2008 vote by Bank of America shareholders to approve the Merger.
Similar class action complaints have also been filed in the U.S. District Courts for the Northern Districts of Georgia and California and the District of Kansas.
According to the June 30, 2009, Opinion signed by Judge Denny Chin, the securities, derivative, and ERISA actions are each separately consolidated. The Public Pension Fund group is appointed lead plaintiff in the securities actions, and its choice for lead counsel is approved. The Institutional Group is appointed interim lead plaintiff in the derivative actions and KSF and Saxena White are appointed interim co-lead counsel. Harwood Feffer, Squitieri & Fearon, and Hagens Berman are appointed interim co-lead counsel in the ERISA actions.
On July 30, 2009, the Court entered the Consolidation Order signed by Judge Denny Chin. According to the Order, the Securities Actions are consolidated into Master File No. 09 MDL 2058 (DC) for all purposes including, but not limited to, pretrial proceedings (including any discovery), and any trial. However, Bahnmaier, as an individual action, is consolidated for pretrial proceedings only pursuant to 28 U.S.C. § 1407(a) and Fed. R. Civ. P. 42 (a). The docket in Master File No. 09 MDL 2058 DC shall constitute the Master Docket for the Securities Actions. Every pleading in the Securities Actions shall bear the following caption: In Re Bank Of America Corp. Securities, Derivative, And Employment Retirement Income Act (ERISA) Litigation.
On September 25, 2009, the lead plaintiffs filed Consolidated Amended Class Action Complaint, naming a number of additional defendants and claims to the action. On November 24 and December 8, 2009, the defendants filed several motions to dismiss the Consolidated Amended Class Action Complaint.
On December 22, 2009, the Iron Workers of Western Pennsylvania Pension Plan and MARTA/ATU Local 732 Employees Retirement Plan (the "Iron Workers plaintiffs") filed a class action complaint on behalf of holders of debt securities against BoA and other defendants for alleged misstatements and omissions in connection with BOA'S merger with Merrill. (No. 09 Civ. 10394). On February 22, 2010, the Iron Workers plaintiffs filed a motion for appointment as lead plaintiffs and the appointment of their attorneys as lead counsel.
On January 3, 2010, Charles Dornfest filed a class action complaint on behalf of options investors against BoA and other defendants for alleged misstatements and omissions in connection with BOA'S merger with Merrill. (No. 10 Civ. 275).
On March 2, 2010, a case was filed titled Kenneth A. Ciullo, et al. v. Bank of America, et al., case number 10-CV-01673. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. This action arises out of the dissemination of materially false and misleading statements and omissions by defendants concerning the financial conditions of BAC and Merrill Lynch & Co., Inc. ("Merrill") and regarding BAC's acquisition of Merrill (the "Merger"). As a result of defendants' false and misleading statements, BAC options traded at artificially inflated prices during the Class Period. The complaint alleges that during the Class Period defendants made materially misleading statements to investors concerning, among other things, Merrill's fourth quarter losses, Merrill's and BAC's true financial condition, and that BAC had secretly agreed to allow Merrill to pay its executives billions of dollars in bonuses on an accelerated schedule. In response to disclosures made concerning the Merrill bonuses, the mounting losses at Merrill, and the deteriorating financial condition of BAC, the price of BAC options fell significantly resulting in damages to BAC options investors. On March 16, 2010, the Ciullos moved for consolidation with the Dornfest action only, and for appointment as lead plaintiffs.
According to the Memorandum Decision entered on April 12, 2010, the Iron Workers, Dornfest, and Ciullo arise out of the same facts and circumstances relating to BOA'S acquisition of Merrill as are at issue in the Consolidated Securities Actions. The cases are substantially similar and, except perhaps with respect to damages, raise the same issues of fact and law. Hence, the three cases should be consolidated into the Consolidated Securities Actions (No. 09 MDL 2058). The plaintiffs in Iron Workers, Dornfest, and Ciullo are free to pursue their claims as individual cases - but not as class actions. The motions of the plaintiffs in these three cases for appointment as lead plaintiffs and the appointment of their counsel as lead counsel are denied.
According to an article dated August 30, 2010, in an August 27, 2010 opinion so massive that its table of contents alone is five pages long, Southern District of New York Judge Kevin Castel granted in part and denied in part the motions to dismiss in the consolidated securities and derivative litigation arising from Bank of America’s January 2009 acquisition of Merrill Lynch and related events. Though the opinion dismisses parts of the lawsuit, other substantial pieces, particularly those related to the controversial bonuses paid to Merrill employees at the end of 2008, will be going forward.
On October 22, 2010, the lead plaintiffs filed a Consolidated Second Amended Class Action Complaint. The defendants responded by filing several motions to dismiss on November 29, 2010.
According to the Memorandum and Order signed by Judge P. Kevin Castel on July 29, 2011, the defendants’ motion to dismiss is granted as to plaintiffs’ Section 10(b) and Rule 10b-5 claim directed toward non-disclosure of federal financial assistance. The motion also is granted as to plaintiffs’ standing to pursue claims on behalf of holders of BofA preferred shares, debt securities and call options, and only those claims brought on behalf of holders of CUSIP 060505DP6 bonds and January 2011 call options may proceed. The defendants’ motion is denied as to plaintiffs’ Section 10(b) and Rule 10b-5 claims directed to non-disclosure of Merrill’s losses in the fourth quarter of 2008.
The parties have been ordered to complete class certification discovery no later than October 3, 2011. Plaintiffs may move for class certification no later than October 17, 2011. The plaintiffs filed a motion to certify the class on October 17, 2011.
On April 12, 2012, the Court issued an order granting defendants' motions to dismiss claims unique to an individual plaintiff. The plaintiff's application for leave to replead was denied.
On May 29, 2011, a Stipulation of Voluntary Dismissal without Prejudice was submitted by the plaintiff against one of the individual defendants.
On July 26, 2012, the plaintiffs filed a Fourth Amended Consolidated Complaint against all of the Defendants. On the next day, an amended complaint was also filed on this docket.
On August 30, 2012, a Stipulation of Voluntary Partial Dismissal Pursuant to Rule 41(a)(I) of the Federal Rules of Civil Procedure, Plaintiffs dismiss with prejudice, their claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933.
On November 30, 2012, the parties entered into a Stipulation of Settlement. On December 4, the Court entered an Order preliminarily approving the settlement. On April 8, 2013, the Court issued the Judgment Approving Class Action Settlement.
On April 8, 2013, the Court issued an Order awarding attorneys' fees and expenses for co-lead counsel.
On April 23, 2013, members of the class filed a Notice of Appeal, appealing the Court's April 8 decision approving the settlement. The next day, one of the plaintiffs filed a separate Notice of Appeal, also appealing the settlement approval.
On April 25, 2013, the Court issued an Order granting the defendants' motions to dismiss in two separate derivative actions.
On May 7, 2013, certain parties to this action filed a Notice appealing the Settlement approval and the Attorneys' Fees and Expenses Order.
SIC Code: 6021
Industry: Money Center Banks
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