Chimicles & Tikellis LLP Announces Court Approval Of $62.5 Million Settlement Of Bank Of America Derivative Litigation
WILMINGTON, Del., Jan. 18, 2013 /PRNewswire-USNewswire/ -- Chimicles & Tikellis LLP is pleased to announce Court approval of a $62.5 million settlement of derivative claims brought on behalf of Bank of America Corporation relating to Bank of America's 2009 acquisition of Merrill Lynch & Co. The settlement was approved by Judge Kevin Castel on January 11, 2013, in In re Bank of America Corp. Securities, Derivative, and Employee Retirement Income Security Act (ERISA) Litigation, 1:09-MD-02058 (PKC) ("New York Action"). The $62.5 million settlement represents a significant improvement of a $20 million settlement which was agreed to by the parties in the New York Action in April 2012, and which was vigorously opposed by Chimicles & Tikellis and its Co-Lead Counsel, Horwitz, Horwitz & Paradis and Wolf, Haldenstein, Adler, Freeman & Herz LLP, on behalf of Delaware Plaintiffs who, at the time the original $20 million settlement was announced, were preparing to go to trial in the Delaware Court of Chancery in a separate parallel derivative action relating to the Merrill Lynch acquisition, In re Bank of America Corporation Stockholder Derivative Litigation, C.A. No. 4307-CS ("Delaware Action"). On behalf of the Plaintiffs in the Delaware Action, Chimicles & Tikellis and its Co-Lead Counsel aggressively opposed and objected to the original $20 million settlement as grossly inadequate for Bank of America and its stockholders based on the evidence developed in the Delaware Action and experts engaged by Plaintiffs in the Delaware Action. As a result of the Delaware Action Plaintiffs' objection and ensuing negotiations led by the Delaware objectors, the settlement was revised to increase by more than three times the amount to be paid to Bank of America Corporation in settlement.
Following Bank of America's January 1, 2009 acquisition of Merrill Lynch and the subsequent disclosure of the dramatic deterioration of Merrill Lynch's financial condition, litigation was commenced, including the Delaware Action and the New York Action, both of which included derivative claims against Bank of America's officers and directors responsible for breaches of fiduciary duty and the failure to disclose critical facts about the Merrill Lynch merger. Litigation proceeded in both actions, including the production of millions of pages of documents and the taking of dozens of depositions. Pursuant to an order of the Delaware Court of Chancery, the Delaware Action was scheduled for trial before Chancellor Leo E. Strine, Jr. to commence on October 22, 2012.
On April 12, 2012, Bank of America announced that a settlement in principle of all derivative claims had been reached with the Plaintiffs in the New York Action which included a $20 million payment to Bank of America and Bank of America's agreement to institute certain non-monetary corporate governance reforms. That settlement, if it had been approved by the New York Court, contemplated the release and dismissal of all derivative claims relating to the Merrill Lynch acquisition including the claims in the Delaware Action. As a result of the announced settlement, Chancellor Strine entered a stay of the Delaware Action, but noted that if the settlement was not approved by the federal court in New York all Defendants would proceed to trial in the Delaware Action.
After nearly a year of aggressive opposition and objection to the original settlement by Co-Lead Counsel in the Delaware Action on behalf of the Delaware objectors, on January 4, 2013, Judge Castel entered an order directing the counsel for the parties to the settlement in the New York Action to meet with counsel for the Delaware objectors on January 7, 2013 to discuss revisions to the settlement. This led to the revised settlement.In presenting the revised settlement terms, counsel for the Individual Defendants stated to the Court:
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