Summary
This 8-K filing from Bank of America Corporation (BAC) on November 5, 2010, primarily concerns a significant legal development related to the Countrywide Financial Corporation lawsuit, "Maine State Retirement System v. Countrywide Financial Corporation, et al.". The U.S. District Court for the Central District of California granted Countrywide's motion to dismiss the amended complaint in its entirety, with leave to amend. The court's ruling limits the scope of the lawsuit by restricting plaintiffs' standing to offerings in which they actually purchased securities and by tolling the statute of limitations only for specific prior actions. This outcome is favorable for Bank of America, as it is expected to substantially reduce the number of offerings at issue in the "Maine State" case. While the plaintiffs have been granted a limited time to file a second amended complaint, this dismissal represents a positive step in mitigating potential liabilities stemming from legacy Countrywide mortgage-backed securities litigation. Investors should monitor any further developments in this case and the potential impact on BAC's financial exposure.
Key Highlights
- 1Court granted Countrywide's motion to dismiss the "Maine State Retirement System v. Countrywide" lawsuit in its entirety, with leave to amend.
- 2The court ruled that plaintiffs only have standing for offerings where they actually purchased securities.
- 3The statute of limitations tolling is limited to offerings where named plaintiffs in a prior state court action had also purchased securities.
- 4Bank of America expects this ruling to significantly reduce the number of offerings involved in the "Maine State" case.
- 5This development is a positive step in managing legal and financial risks associated with legacy Countrywide mortgage-backed securities.
- 6The plaintiffs have 30 days to file a second amended complaint.
- 7A press release dated November 5, 2010, is filed as an exhibit.