Bank of America 2006 Annual Report Download - page 133

in part, dismissing ten of the twelve counts. After the plaintiff’s filing of a
First Amended Complaint and the Corporation’s motion to dismiss such
complaint, the court granted the Corporation’s motion to dismiss in part,
allowing the plaintiff to proceed on the previously dismissed federal and
state RICO claims with respect to three transactions entered into between
the Corporation and Parmalat. The Corporation has filed an answer and
counterclaims (the Bank of America Counterclaims) seeking damages
against Parmalat and a number of its subsidiaries and affiliates as com-
pensation for financial losses and other damages suffered. Parmalat filed
a motion to dismiss certain of the Bank of America Counterclaims, and
that motion is pending. On November 21, 2006, Parmalat filed a motion to
amend the First Amended Complaint to add a claim of breach of fiduciary
duty by the Corporation to Parmalat. That motion is pending.
On November 23, 2005, the Official Liquidators of Food Holdings Ltd.
and Dairy Holdings Ltd., two entities in liquidation proceedings in the
Cayman Islands, filed a complaint against the Corporation and several
related entities in the U.S. District Court for the Southern District of New
York, entitled Food Holdings Ltd., et al. v. Bank of America Corp., et al,
(the Food Holdings Action). Also on November 23, 2005, the Provisional
Liquidators of Parmalat Capital Finance Ltd. (who are also the liquidators
in the Food Holdings Action), filed a complaint against the Corporation and
several related entities in North Carolina state court for Mecklenburg
County, entitled Parmalat Capital Finance Limited v. Bank of America
Corp., et al. (the PCFL Action). Both actions have been consolidated for
pretrial purposes with the other pending actions in the In Re Parmalat
Securities Litigation matter. The Food Holdings Action alleges that the
Corporation and other defendants conspired with Parmalat in carrying out
transactions involving the plaintiffs in connection with the funding of
Parmalat’s Brazilian entities, and it asserts claims for fraud, breach of
fiduciary duty, civil conspiracy and other related claims. The complaint
seeks damages in excess of $400 million. The PCFL Action alleges that
the Corporation and other defendants conspired with Parmalat insiders to
loot and divert monies from PCFL, and it asserts claims for breach of fidu-
ciary duty, civil conspiracy and other related claims. PCFL seeks “hundreds
of millions of dollars” in damages. The Corporation has moved to dismiss
both actions. The motions are pending.
Certain purchasers of Parmalat-related private placement offerings
have filed complaints against the Corporation and various related entities
in the following actions: Principal Global Investors, LLC, et al. v. Bank of
America Corporation, et al. in the U.S. District Court for the Southern Dis-
trict of Iowa; Monumental Life Insurance Company, et al. v. Bank of Amer-
ica Corporation, et al. in the U.S. District Court for the Northern District of
Iowa; Prudential Insurance Company of America and Hartford Life
Insurance Company v. Bank of America Corporation, et al. in the U.S. Dis-
trict Court for the Northern District of Illinois; Allstate Life Insurance
Company v. Bank of America Corporation, et al. in the U.S. District Court
for the Northern District of Illinois; Hartford Life Insurance v. Bank of Amer-
ica Corporation, et al. in the U.S. District Court for the Southern District of
New York; and John Hancock Life Insurance Company, et al. v. Bank of
America Corporation et al. in the U.S. District Court for the District of
Massachusetts. The actions variously allege violations of federal and state
securities law and state common law, and seek rescission and
unspecified damages based upon the Corporation’s and related entities’
alleged roles in certain private placement offerings issued by Parmalat-
related companies. Except for the John Hancock Life Insurance case, the
most recently filed matter, the cases have been transferred to the U.S.
District Court for the Southern District of New York for coordinated pre-trial
purposes with the In re Parmalat Securities Litigation matter. The plaintiffs
seek rescission and unspecified damages resulting from alleged pur-
chases of approximately $305 million in private placement instruments. In
addition to claims relating to private placement transactions, the John
Hancock Life Insurance case also claims damages relating to a separate
Eurobond investment alleged in the amount of $25 million.
On January 18, 2006, Gerald K. Smith, in his capacity as Trustee of
Farmland Dairies LLC Litigation Trust, filed a complaint against the Corpo-
ration, BANA, BAS, BASL, Bank of America National Trust & Savings Asso-
ciation and BankAmerica International Limited, as well as other financial
institutions and accounting firms, in the U.S. District Court for the South-
ern District of New York, entitled Gerald K. Smith, Litigation Trustee v.
Bank of America Corporation, et al. (the Farmland Action). Prior to bank-
ruptcy restructuring, Farmland Dairies LLC was a wholly-owned subsidiary
of Parmalat USA Corporation, which was a wholly-owned subsidiary of
Parmalat SpA. The Farmland Action asserts claims of aiding and abetting,
breach of fiduciary duty, civil conspiracy and related claims against the
Bank of America defendants and other defendants. The plaintiff seeks
unspecified damages. On February 23, 2006, the plaintiff filed its First
Amended Complaint, which was dismissed on August 16, 2006, with leave
to file a Second Amended Complaint, which plaintiff filed on September 8,
2006. The Corporation has moved to dismiss the Second Amended Com-
plaint.
On April 21, 2006, the Plan Administrator of the Plan of Liquidation
of Parmalat-USA Corporation filed a complaint in the U.S. District Court for
the Southern District of New York against the Corporation and certain of
its subsidiaries, as well as other financial institutions and accounting
firms entitled G. Peter Pappas in his capacity as the Plan Administrator of
the Plan of Liquidation of Parmalat-USA Corporation v. Bank of America
Corporation, et al. (the Parmalat USA Action). The Parmalat USA Action
asserts claims of aiding and abetting, breach of fiduciary duty, civil con-
spiracy and related claims against the Bank of America defendants and
other defendants. The plaintiff seeks unspecified damages. The Corpo-
ration has moved to dismiss the Parmalat USA Action. The motion is pend-
ing.
Pension Plan Matters
The Corporation is a defendant in a putative class action entitled William
L. Pender, et al. v. Bank of America Corporation, et al. (formerly captioned
Anita Pothier, et al. v. Bank of America Corporation, et al.), which was ini-
tially filed June 2004 in the U.S. District Court for the Southern District of
Illinois and subsequently transferred to the U.S. District Court for the
Western District of North Carolina. The action is brought on behalf of
participants in or beneficiaries of The Bank of America Pension Plan
(formerly known as the NationsBank Cash Balance Plan) and The Bank of
America 401(k) Plan (formerly known as the NationsBank 401(k) Plan).
The Third Amended Complaint names as defendants the Corporation,
BANA, The Bank of America Pension Plan, The Bank of America 401(k)
Plan, the Bank of America Corporation Corporate Benefits Committee and
various members thereof, and PricewaterhouseCoopers LLP. The two
named plaintiffs are alleged to be a current and a former participant in The
Bank of America Pension Plan and 401(k) Plan.
The complaint alleges the defendants violated various provisions of
ERISA, including that the design of The Bank of America Pension Plan vio-
lated ERISA’s defined benefit pension plan standards and that such plan’s
definition of normal retirement age is invalid. In addition, the complaint
alleges age discrimination in the design and operation of The Bank of
America Pension Plan, unlawful lump sum benefit calculation, violation of
ERISA’s “anti-backloading” rule, that certain voluntary transfers of assets
by participants in The Bank of America 401(k) Plan to The Bank of America
Pension Plan violated ERISA, and other related claims. The complaint
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