Seeking Alpha

Bank of America (BAC) shareholders better familiarize themselves with Article 77, writes Mark...

Bank of America (BAC) shareholders better familiarize themselves with Article 77, writes Mark Palmer, as it's possible the $8.5B the bank has reserved to handle claims against Countrywide MBS will be woefully small. At issue is an Article 77 proceeding set to begin May 30 at which a judge could toss the $8.5B settlement. The number might then reach as high as $60.5B, writes Palmer - about 24% of the bank's book value.
Comments (20)
  • Dirty Capitalist
    , contributor
    Comments (109) | Send Message
     
    Gee... you think Mark Palmer is a short?
    26 Apr 2013, 11:28 AM Reply Like
  • tomlos
    , contributor
    Comments (1072) | Send Message
     
    Obama needs a bank to nationalize, here's the first try.
    26 Apr 2013, 11:32 AM Reply Like
  • 21thomas99
    , contributor
    Comments (388) | Send Message
     
    What a myopic, shallow comment.

     

    Thanks for not adding value, from one conservative to another.
    26 Apr 2013, 01:19 PM Reply Like
  • John/Jack
    , contributor
    Comments (60) | Send Message
     
    If he throws out the settlement, BAC should have to reduce reserves. These people took 8.5 cents on the dollar because they agreed in writing never to sue, as noted by the first judge. This story is a joke.
    26 Apr 2013, 11:41 AM Reply Like
  • WPSPIKER
    , contributor
    Comments (1072) | Send Message
     
    Yep if they do toss it then (BAC) should retract the past settlements (ALL OF THEM) and close Countrywide which the Government (FDIC) and M.S. pretty much forced Countrywide onto them. They (BAC) has maintained this "separation" at some cost to them "Just in case" they needed to dump them.
    26 Apr 2013, 12:12 PM Reply Like
  • charliezap
    , contributor
    Comments (1102) | Send Message
     
    """ . . (BAC) should retract the past settlements . . and close Countrywide which the Government (FDIC) and M.S. [Morgan Stanley? Multiple Sclerosis? Microsoft?] pretty much forced Countrywide onto them [sic]."""

     

    Nonsense. Ken Lewis did it with his eyes wide open.
    http://n.pr/UzAFMW
    26 Apr 2013, 06:19 PM Reply Like
  • ezdoesitt
    , contributor
    Comment (1) | Send Message
     
    Forced on to them?????? Please
    5 May 2013, 09:21 PM Reply Like
  • tullius
    , contributor
    Comments (54) | Send Message
     
    The lawsuits should have been filed against the top gun at Countrywide and all the minions who bled this company dry leading up to the sale. Lewis, and his hungry advisers, should also bear the financial burden for forcing this risk on BAC shareholders.
    26 Apr 2013, 12:19 PM Reply Like
  • glparent
    , contributor
    Comments (2) | Send Message
     
    definitely a short.
    26 Apr 2013, 12:46 PM Reply Like
  • Nmidair
    , contributor
    Comments (13) | Send Message
     
    MBS is just fine with the $8.5 settlement, the judge wont change a thing. BAC has settled most suits for 10 to 20 cents on the dollar this whole time. BAC should have bankrupted Countrywide years ago and still might if they feel like it. So Palmer is your short underwater by....50%...oops!!!!!
    26 Apr 2013, 12:56 PM Reply Like
  • Chancer
    , contributor
    Comments (2362) | Send Message
     
    Worst case scenario: BAC price also drops 24% to $9.48.

     

    What a great buying opportunity? Back up the freight train.

     

    Seriously, doubt this happens.
    26 Apr 2013, 01:07 PM Reply Like
  • MexCom
    , contributor
    Comments (3042) | Send Message
     
    The argument is that the derivative suits have not surfaced. Not only were the mortgage holders harmed, but the stockholders, the employees and the office cleaning crews. This extends also to all their banking customers, all the tax payers that help to bail them out, the Treasury employees who's careers were harmed, and the terrorists. The economic collapse harmed the all wage earners, annuity stipend recipients, retirees, students and all of their relatives. To compensate all these victims the argument is to set aside enough to eclipse the entire wealth of the world. Unfortunately this will not work because the IRS will not allow this tax dodge scheme to continue much longer - much more in fact will return to the balance sheet as cash.
    26 Apr 2013, 01:17 PM Reply Like
  • jetter74
    , contributor
    Comments (2) | Send Message
     
    I read Seeking Alpha articles to keep track of the shorts. Here's another one....
    26 Apr 2013, 01:40 PM Reply Like
  • wally R
    , contributor
    Comments (3) | Send Message
     
    Palmer is short. The settlement should stand if BAC had not bought Countrywide the taxpayers would be footing the bill. Oh ya where is Angelo and his friends..Chris Dodd ect.
    26 Apr 2013, 01:42 PM Reply Like
  • JaxxBat
    , contributor
    Comments (527) | Send Message
     
    sold BAC prefereds..
    26 Apr 2013, 03:20 PM Reply Like
  • Nate Sterling
    , contributor
    Comments (396) | Send Message
     
    This is a phony risk conjured up by a short-seller because BAC could file a bankruptcy as to Countrywide Inc. and discharge all its assets and liabilities as they have taken great pains to keep as legally separate and distinct entities from BAC Inc. so in the highly unlikely event the $8.5 billion settlement is somehow overturned by the judge BAC could discharge and liquidate the Countrywide debt/potential debt entirely (and the settlement is very unlikely to be overturned by the judge because there is a very strong public policy and very strong laws favoring and upholding voluntary settlements between litigants).
    26 Apr 2013, 04:43 PM Reply Like
  • TBV
    , contributor
    Comments (110) | Send Message
     
    Who is Mark Palmer? I know golf legend Arnold Palmer..lol..anyway its not the Judge's right to rule whether 8.5B is suffice or not. The judge can only decide whether this settlement has all the law biding technicalities in the place. The court doesnt care even if the settlement was for 5B as long as the both parties are agreed and the both parties played by the rules that has been provided to them by the court.
    26 Apr 2013, 05:56 PM Reply Like
  • JPROPS
    , contributor
    Comments (3) | Send Message
     
    Tell me how do you spell S.H.O.R.T again? If anyone thinks BAC is going to land themselves in a $60.5b hole, they have a lot to learn.
    27 Apr 2013, 08:28 AM Reply Like
  • caj1455
    , contributor
    Comments (10) | Send Message
     
    Just banko the countrywide unit and let the real Bof A get underway....this stock is going to soar.....and yes, I am long.
    28 Apr 2013, 08:28 PM Reply Like
  • TBV
    , contributor
    Comments (110) | Send Message
     
    "New York attorney-general Eric Schneiderman and Delaware attorney-general Beau Biden have removed their objections to Bank of America Corp (NYSE:BAC)’s proposed $8.5 billion settlement with investors in Countrywide mortgage-backed securities, according to court filings. The news comes at a time when analysts are concerned that the bank might not have set aside enough funds to cover its legal costs if the settlement wasn’t approved."... now you learn..lol
    6 May 2013, 09:47 AM Reply Like
DJIA (DIA) S&P 500 (SPY)