Bank of America 2007 Annual Report Download - page 151

Proceedings in Italy
On May 26, 2004, The Public Prosecutor’s Office for the Court of Milan,
Italy filed criminal charges against Luca Sala, Luis Moncada, and Antonio
Luzi, three former employees of the Corporation, alleging the crime of
market manipulation in connection with a press release issued by Parma-
lat. The Public Prosecutor’s Office also filed a related charge against the
Corporation asserting administrative liability based on an alleged failure to
maintain an organizational model sufficient to prevent the alleged criminal
activities of its former employees. The trial on such charges will begin in
March 2008.
The main trial of the market manipulation charges against Messrs.
Luzi, Moncada, and Sala began in the Court of Milan, Italy on Sep-
tember 28, 2005. Hearing dates in this trial are currently set through May
of 2008. The Corporation is participating in this trial as a party that has
been damaged by the alleged actions of defendants other than its former
employees, including former Parmalat officials. Additionally, pursuant to a
December 19, 2005 court ruling, other third parties are participating in the
trial who claim damages against BANA as a result of the alleged criminal
violations by the Corporation’s former employees and other defendants.
Separately, The Public Prosecutor’s Office for the Court of Parma,
Italy is conducting an investigation into the collapse of Parmalat. The
Corporation has cooperated, and continues to cooperate, with the Public
Prosecutor’s Office with respect to this investigation. The Public Prose-
cutor’s Office has given notice of its intention to file charges, including a
charge of the crime of fraudulent bankruptcy under Italian criminal law, in
connection with this investigation against the same three former employ-
ees of the Corporation who are named in the Milan criminal proceedings,
Messrs. Luzi, Moncada and Sala.
Proceedings in the United States
On March 5, 2004, a First Amended Complaint was filed in a securities
action pending in the U.S. District Court for the Southern District of New
York entitled Southern Alaska Carpenters Pension Fund et al. v. Bonlat
Financing Corporation et al. The action is brought on behalf of a putative
class of purchasers of Parmalat securities, alleges violations of the
federal securities laws against the Corporation and certain affiliates, and
seeks unspecified damages. Following orders on motions to dismiss, the
remaining claims concern two transactions entered into between the
Corporation and Parmalat. The plaintiffs filed a motion for class certifi-
cation on September 21, 2006, which remains pending. On July 24, 2007,
the District Court granted the Corporation’s motion to dismiss the claims
of foreign purchaser plaintiffs for lack of subject matter jurisdiction.
On October 7, 2004, Enrico Bondi filed an action in the U.S. District
Court for the Western District of North Carolina on behalf of Parmalat and
its shareholders and creditors against the Corporation and various related
entities, entitled Dr. Enrico Bondi, Extraordinary Commissioner of Parmalat
Finanziaria, S.p.A., et al. v. Bank of America Corporation, et al. (the Bondi
Action). The complaint alleged federal and state RICO claims and various
state law claims, including fraud. The complaint seeks damages in excess
of $10 billion. The Bondi Action was transferred to the U.S. District Court
for the Southern District of New York for coordinated pre-trial purposes
with putative class actions and other related cases against non-Bank of
America defendants under the caption In re Parmalat Securities Litigation.
Following orders on motions to dismiss, the remaining claims are federal
and state RICO claims, a breach of fiduciary duty claim, and other state
law claims with respect to three transactions entered into between the
Corporation and Parmalat. The Corporation filed an answer and counter-
claims (the Counterclaims) seeking damages. The District Court granted in
part a motion to dismiss certain of the Counterclaims, leaving intact the
counterclaims for fraud, negligent misrepresentation and civil conspiracy
against Parmalat S.p.A., Parmalat Finanziaria S.p.A. and Parmalat Nether-
lands, B.V., as well as a claim for securities fraud against Parmalat S.p.A.
and Parmalat Finanziaria S.p.A.
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. All cases have been transferred to the U.S. District
Court for the Southern District of New York for coordinated pre-trial pur-
poses 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.
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 is pend-
ing in 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 Bal-
ance Plan) and The Bank of America 401(k) Plan (formerly known as the
NationsBank 401(k) Plan). 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 are defendants. The complaint alleges
violations of ERISA, including that the design of The Bank of America Pen-
sion Plan violated 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 by 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 alleges that plan
participants are entitled to greater benefits and seeks declaratory relief,
monetary relief in an unspecified amount, equitable relief, including an
order reforming The Bank of America Pension Plan, attorneys’ fees and
interest. On December 1, 2005, the plaintiffs moved to certify classes
consisting of, among others, (i) all persons who accrued or who are cur-
rently accruing benefits under The Bank of America Pension Plan and
(ii) all persons who elected to have amounts representing their account
balances under The Bank of America 401(k) Plan transferred to The Bank
of America Pension Plan. That motion, and a motion to dismiss the com-
plaint, are pending.
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