BTIG analyst Mark Palmer stated in a recent research note that he has "heard variations on a theory that Bank of America intends to drag out its litigation with MBIA until the bond insurer's structured finance unit exhausts its liquidity." However, Palmer thinks that would take until mid-2013. "Does Bank of America really want to go through a full year during which more and more damaging information about Countrywide could emerge through discovery, and nasty precedents could be handed down in Bransten's courtroom?" Palmer asks in his report. Palmer doesn't think so. Rather, he believes Bank of America will eventually settle the case for $2-3 billion--a view that is the key to his recommendation of MBIA shares. Still, Bank of America has already allowed the case to drag on much farther than Palmer would have expected. "We have struggled to understand Bank of America's overall strategy regarding MBIA, particularly given our view that it would be imprudent for the bank to continue the litigation given the consequences of allowing information and precedents from the case to be used by many other plaintiffs to advance their own cases against Countrywide," Palmer wrote. A call and an email message to a Bank of America spokesman were not returned. An MBIA spokesman declined to comment. -- Written by Dan Freed in New York. Follow this writer on Twitter.