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Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
BofA Prevails in Appeal of Class Action Settlement
- Client News
- November 5, 2014
Paul, Weiss client Bank of America Corporation (BofA) and several of its directors and officers achieved a victory in the United States Court of Appeals for the Second Circuit. On appeal, the Second Circuit affirmed the decision by Judge P. Kevin Castel of the Southern District of New York approving BofA's $2.425 billion settlement of a consolidated class action asserting claims related to BofA's 2008 acquisition of Merrill Lynch & Co.
In 2008, BofA shareholders brought several class actions alleging that the bank and its directors and officers withheld material information and made materially misleading statements or omissions regarding BofA's 2008 acquisitions of Merrill, including statements or omissions concerning Merrill's mounting losses throughout the process of the acquisition by BofA and the amount of bonuses paid to Merrill executives around the time of the acquisition.
In November 2012, on the eve of trial, BofA and lead plaintiffs in the consolidated class action negotiated a $2.425 billion settlement of all claims. Out of the approximately 3.2 million-member class, ten class members filed objections to the settlement. These objections claimed, among other things, that the amount of attorneys' fees awarded to counsel for lead plaintiffs was unreasonable, that the amount of costs awarded to representative plaintiffs was unreasonable, and that there were deficiencies in the notice to class members. Judge Castel approved the settlement over these objections, and the objectors appealed.
In its decision, the Second Circuit concluded that the district court had not abused its discretion in approving the settlement. The court held that the district court had awarded a reasonable amount of attorneys' fees, that the settlement awarded a reasonable amount of costs to representative plaintiffs, and that there were no deficiencies in the class notice. On these grounds, the Second Circuit affirmed the district court's decision approving the $2.425 billion settlement.