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| 2002 News and Press Releases |
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SETTLEMENT:
Judge Approves Deal For $490 Million In Bank Of America Suit; Attorneys Want $122 Million In Fees
By: Peter Shinkle
St. Louis Post-Dispatch. October 2, 2002
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EXCERPT: A federal judge has approved a $490 million settlement of a class-action lawsuit filed over the 1998 merger that created Bank of America Corp. The settlement of the case, one of the largest class-action securities settlements in history, clears the way for the judge to address a request by attorneys to be paid up to $122.5 million of the total as their fees. The request has drawn criticism, and the attorneys' intramural tussle over the fees has become contentious at times. U.S. District Judge John Nangle approved the settlement in an order Monday, saying it was "fair, reasonable and adequate." The judge's approval had been expected since Bank of America announced the deal in February. Still, the litigation had gotten caught up in complex maneuvering by class-action law firms seeking to contest the settlement. The final approval drew a sigh of relief Tuesday from one local attorney. Martin Green, of the Clayton law firm Green Schaaf & Jacobson PC, the lead counsel for the largest group of shareholders, hailed the judge's ruling. "We are all very happy about it," he said. In the merger, the former NationsBank joined with BankAmerica, creating one of the largest banks in the world. Bank of America Corp., with more than 140,000 employees, had $637 billion in assets at the end of the first quarter of this year. After the merger was completed, NationsBank shareholders claimed that BankAmerica had won their approval of the deal by hiding financial problems at BankAmerica. In particular, the NationsBank shareholders pointed to a troubled transaction with D.E. Shaw & Co., a New York hedge fund. Ultimately, the bank wrote off a loss of $372 million in connection with the Shaw transaction. At the same time, BankAmerica shareholders filed their own lawsuits, claiming that NationsBank had made misleading statements about their intentions for the merger. They claimed, for example, that the deal was described as a merger of equals, but that NationsBank's chief executive, Hugh McColl, intended all along to push aside the BankAmerica chief executive with whom he was to share power. In the end, Bank of America concluded it would be wiser to pay a known sum, rather than pay for continued litigation and run the risk of losing at trial. Of the total sum, $333.2 million goes to former NationsBank shareholders, while former BankAmerica shareholders are to receive $156.8 million.
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