CHARLOTTE, N.C. (
) -- If
Bank of America
discloses privileged discussions with attorneys about the
deal, it could remove the overhang of uncertainty that surrounds
who are scrambling for the chance to replace CEO Ken Lewis.
After months of
, the bank's board has reportedly voted to hand over documents that outline discussions with top lawyers in a tricky legal situation. BofA had held tight to the argument that the information was
protected by attorney-client privilege
while also arguing that the advice was its legal basis for moving forward with the now-controversial merger.
The move comes after the key decision maker,
, announced plans to leave the bank at the end of December. The board, which has shown stalwart support of the 62-year-old executive, voted on Friday to provide information to New York Attorney General Andrew Cuomo, according to the
Wall Street Journal
, as well as certain documents to satisfy a judge's demands over a settlement with the
Securities and Exchange Commission
Though stripped of his chairmanship in April, Lewis is still a director. He surprised many fellow board members weeks ago with his resignation, and has set up an intensely competitive contest among his deputies for a succession plan at a sensitive time for the firm.
There will be intense scrutiny on Lewis's dealings with lawyers and how much responsibility they share in going forward with the deal will be closely examined. Other top executives who are competing to replace Lewis will also be in the spotlight, including Brian Moynihan, the head of consumer and small business banking, as well as Chief Risk Officer Greg Curl, who was a key engineer of the Merrill deal, and several others.
Lewis had considered walking away by invoking a material adverse change, or MAC, clause, as losses at Merrill spiraled out of control. Regulators
to have BofA move forward, however, telling Lewis that the government's legal counsel found the MAC argument legally unsupportable, or that it would at least cause great market turmoil, and potentially cost shareholders much more in legal costs down the line.
Ultimately, Lewis decided to close the deal on Jan. 1 by accepting another $20 billion in federal aid. Merrill's losses weren't disclosed to shareholders immediately, nor were billions of dollars in bonuses to Merrill employees that were speedily paid out ahead of the deal.
The bank has long wanted to put the Merrill issue to rest, and maintained all along that it did nothing wrong. But with
already gearing up for a fight and investigators looking to satisfy angry taxpayers by holding executives accountable, what happened around the closing of the deal may be less of a legal question than whether the next chosen leader of BofA has any Merrill dirt on his hands.
-- Written by Lauren Tara LaCapra in New York