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Michael L. Boyer  

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  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Great piece on the BofA/Merrill Lynch deal in the NY Times (Mon/June 4th); details of omissions by Lewis related to Merrill's losses:

    http://bit.ly/Mb280N

    Still more major rounds of litigation to weigh down the stock.
    Jun 4, 2012. 01:59 AM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Lots of press out on the settlement today.

    CNN note that big banks may have turned corner and the settlement adds some certainty; is in line with estimates; and the reserves are already in place--hence BAC up today and other players just off slightly:

    http://cnnmon.ie/yxrAQ7
    Feb 9, 2012. 11:14 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    An update on this article-- BAC and 4 other major banks close to deal on robo-signing and servicing with Fed/States:

    http://usat.ly/zvdQpz
    Jan 19, 2012. 12:34 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Bank of America, Big Banks Face Massive Credit Card Case

    Dan Freed looks at credit card litigation--another front.

    http://bit.ly/xA8AJU
    Jan 13, 2012. 11:30 AM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    A potential large settlement may be in the works:

    By Rick Rothacker and Aruna Viswanatha

    (Reuters) - As the government nears a deal with top banks to resolve mortgage abuses, the Justice Department has begun reaching out to other banks to gauge their interest in joining the wide-ranging settlement, according to a person familiar with the matter.

    The DOJ has contacted several nationally chartered banks to determine whether they might agree to terms similar to those in the proposed deal, the person said.

    State and federal officials are nearing a settlement with the five largest mortgage servicers - Bank of America Corp, JPMorgan Chase & Co, Wells Fargo & Co, Citigroup Inc and Ally Financial Inc- to resolve allegations of misconduct in processing foreclosures and other issues.

    In exchange for between $20 billion to $25 billion in relief to distressed homeowners, the banks will put behind them potential government lawsuits about improper foreclosures and abuses in originating and servicing the loans.

    In recent weeks Justice officials have approached several other banks about joining the settlement, a move that could potentially push up the total price tag.
    Jan 9, 2012. 11:13 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    The source is: subprime shakeout as one word and a dot. com. Or just search for subprime shakeout to find the site. (looks like the link did not show).
    Jan 2, 2012. 11:11 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Also super in depth coverage of the litigation related to subprime; nice look at allegations, defenses, status of cases, etc:

    http://bit.ly/uyd4sn
    Jan 2, 2012. 11:08 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    And check out Alison Frankel's "On the Case" Reuters Blog for the most detailed insights and commentary on the daily motions and developments (also some good posts on successor liability). Some of the posts may be to0 deep into the legal aspects for general readers but probably interesting for BofA stock holders.
    Dec 23, 2011. 11:53 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    yes, finance mc you will see that idea in the article(s) cited. check out the fraudulent conveyance state law section. thanks.
    Dec 23, 2011. 03:56 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Links for the law review and contingency plan did not show up but you can get full text of law review from searching entire title and the BofA contingency plan was widely reported (in the NY Times and WSJ, etc) so is fairly easy to find...

    The comments are really adding quality and depth to this topic!
    Dec 22, 2011. 06:52 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Great question!

    You can browse this article (see p. 30 onward focusing on the spin off in the mass tort liability context).

    ---Spin-Offs, Fiduciary Duty, and the Law
    Edward S. Adams, Arijit Mukherji downloadable in full pdf at: aw2.fordham.edu/ihtml/...

    --See also: Corporate Spinoffs and Mass Tort Liability
    Kevin M. Warsch, Corporate Spinoffs and Mass Tort Liability, 1995 Colum. Bus. L. Rev. 675

    In short, this move is a page out of the Johns Manville and RJR playbook (i.e., Icahn's quest to separate the tobacco liability from the food biz).

    It makes sense intuitively. Separate the good from the bad. The problem is that BoA would likely be required to adequately capitalize the spun off Countrywide to cover liabilities (tons of cash or equity). There are also state fraudulent conveyance laws that could prevent this and plaintiffs would oppose it like crazy (so it could simply generate a whole new species of legal cases!)

    So they may see no easy way out than take the cases on head on.
    Trying to spin off the liability may just create more claims.

    But on a related point, the contingency plan may be to spin off the healthier Merrill if things go south.

    It looks like as of Sept the contingency plan was to spin off Merrill (worth maybe 7 bucks a share) in a tracking stock. It looks like the piece with least problematic liability.


    From http://bit.ly/tyCupN:


    "If things really get worse for Bank of America (NYSE:BAC), the bank may consider a incomplete spin off of Merrill Lynch, according to a report by the Wall Street Journal.
    In a request by the U.S. Federal Reserve, BofA was questioned to provide a contingency plot to the Fed for what it would do if its business worsens, according to the report, citing people accurate to the matter.
    A Bank of America spokesman said BofA does "not comment on interactions with our regulators."
    One of many options on the list includes the issuance of a Merrill Lynch tracking stock, the Journal said, which would footstep the performance of Merrill, including all revenues and expenses, separately from BofA.
    Merrill, which was bought by BofA in 2009, has become its most profitable rift.
    The Fed’s call comes as the Charlotte, N.C.-based company continues to suffer under high legal costs and additional expenses related to the mortgage mess stirred by Countrywide.
    Banking analyst Dick Bove told FOX Business Friday that all huge U.S. banks, not just BofA, are required to submit a contingency plot to the Fed under the Dodd Frank Act to indicate how they would “disassemble their business in the likelihood that they might fail.”'


    Also another piece on the contingency plan as of September:

    http://nyti.ms/tAJ4tK
    Dec 22, 2011. 06:48 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Thanks for all the insightful comments. These are adding some neat angles on the preferred stock, culpability of the former BofA CEO, and liability.

    I have not researched the BofA preferred much (but see them prominently in some ETF's I hold, along with many European banks).

    Sounds like there may be an article there for someone.
    Dec 22, 2011. 02:44 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Yes, maybe not much left for the 50 billion (estimated) shareholder suit near term after all the Countrywide related claims.

    They may have to eventually get creative with settlements (more--diluted--BofA shares anyone? Part of a new, spin-off firm without the liability?)
    Dec 21, 2011. 10:03 PM | 1 Like Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Hi Goofy Gumper,

    The firm will need more clarity on the litigation exposure front for me to be a buyer. The Countrywide legacy has left them playing clean up from the housing debacle.

    Most of us are already pretty into BofA, especially broadly framing our exposure.

    I looked at my ETF's (especially financial and preferreds), indexes and actively managed funds, and probably have enough overall BofA exposure.

    Add in our mortgage payments and credit cards, and we are all pretty deep in BofA. They have such massive revenue generation potential if they can get past the lawsuits.

    One commentator in the Businessweek piece tags BofA value--if divided up--at 3 times what the company was trading for in Sept.

    Their is value there--just underneath tens of billions of liability. Moynihan and gang will have to clear that off the firm in the next couple of years; they are chipping away at it now.
    Dec 21, 2011. 09:36 PM | Likes Like |Link to Comment
  • Will BofA Succeed? Depends On Its Litigation Strategy [View article]
    Thanks for the kind words.

    Also, I had completed this before the fair lending case headline today (300 + million) but it is actually good to get this one behind BAC as it carried perhaps the most negative public relations baggage of any of their pending cases (racial discrimination).

    While some of the settlements look like "bad news" at first glance, they are actually good news. As Moynihan said "half a billion here, half a billion there." They can afford to pay the claims but it is the uncertainty that keeps investors away.

    It would be great to see some major consolidated structured settlements in 2012 to get many more lawsuits behind BofA, ideally on terms they can pay out over time and still retain profitability.

    Thanks for reading and commenting.
    Dec 21, 2011. 06:58 PM | 2 Likes Like |Link to Comment
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