Bank of America 2011 Annual Report Download - page 226

224 Bank of America 2011
as to 146 of the 148 offerings at issue, dismissing with leave to
amend the state law negligent misrepresentation, aiding and
abetting, and successor liability claims and substantially denying
the motion to dismiss as to the state law fraud and fraudulent
inducement claims.
FHFA Litigation
The FHFA, as conservator for FNMA and FHLMC, filed an action on
September 2, 2011 against the Corporation and related entities,
CFC and related entities, certain former officers of these entities,
and NB Holdings Corporation in New York Supreme Court, New
York County, entitled Federal Housing Finance Agency v.
Countrywide Financial Corporation, et al. (the FHFA Countrywide
Litigation). FHFA’s complaint asserts certain MBS Claims in
connection with allegations that FNMA and FHLMC purchased MBS
issued by CFC-related entities in 86 MBS offerings between 2005
and 2008. The FHFA seeks among other relief, rescission of the
consideration paid for the securities or alternatively damages
allegedly incurred by FNMA and FHLMC. The FHFA also seeks
recovery of punitive damages.
On September 30, 2011, CFC removed the FHFA Countrywide
Litigation from New York Supreme Court to the U.S. District Court
for the Southern District of New York. On February 7, 2012, the
JPML transferred the matter to the Countrywide RMBS MDL. The
FHFA’s motion to remand the case to New York Supreme Court is
pending.
Also on September 2, 2011, the FHFA, as conservator for FNMA
and FHLMC, filed complaints in the U.S. District Court for the
Southern District of New York against the Corporation and Merrill
Lynch related entities, and certain current and former officers and
directors of these entities. The actions are entitled Federal Housing
Finance Agency v. Bank of America Corporation, et al. and Federal
Housing Finance Agency v. Merrill Lynch & Co., Inc., et al. The
complaints assert certain MBS Claims relating to MBS issued
and/or underwritten by the Corporation, Merrill Lynch and related
entities in 23 MBS offerings and in 72 MBS offerings, respectively,
between 2005 and 2008 and allegedly purchased by either FNMA
or FHLMC in their investment portfolio. The FHFA seeks among
other relief, rescission of the consideration paid for the securities
or alternatively damages allegedly incurred by FNMA and FHLMC.
The FHFA also seeks recovery of punitive damages in the Merrill
Lynch action.
Federal Home Loan Bank Litigation
On January 18, 2011, the Federal Home Loan Bank of Atlanta
(FHLB Atlanta) filed a complaint asserting certain MBS Claims
against the Corporation, CFC and other Countrywide entities in
Georgia State Court, Fulton County, entitled Federal Home Loan
Bank of Atlanta v. Countrywide Financial Corporation, et al. FHLB
Atlanta seeks rescission of its purchases or a rescissory measure
of damages, unspecified punitive damages and other unspecified
relief in connection with its alleged purchase of 16 MBS offerings
issued and/or underwritten by Countrywide-related entities
between 2004 and 2007.
On October 15, 2010, the Federal Home Loan Bank of Chicago
(FHLB Chicago) filed a complaint against the Corporation,
Countrywide, MLPF&S and related entities in Illinois Circuit Court,
Cook County, entitled Federal Home Loan Bank of Chicago v. Banc
of America Funding Corp., et al. On April 8, 2011, FHLB Chicago
filed an amended complaint adding Merrill Lynch Mortgage
Investors (MLMI) and others as defendants. FHLB Chicago asserts
certain MBS Claims arising from FHLB Chicago’s alleged purchase
in 13 MBS offerings issued and/or underwritten by affiliates of
the Corporation, Merrill Lynch or Countrywide between 2005 and
2006 and seeks rescission, unspecified damages and other
unspecified relief.
On March 15, 2010, the Federal Home Loan Bank of San
Francisco (FHLB San Francisco) filed an action in California
Superior Court, San Francisco County, entitled, Federal Home Loan
Bank of San Francisco v. Credit Suisse Securities (USA) LLC, et al.
FHLB San Francisco’s complaint asserts certain MBS Claims
against BAS, CFC and several related entities in connection with
its alleged purchases in 51 MBS offerings and one private
placement issued and/or underwritten by those defendants
between 2004 and 2007 and seeks rescission and unspecified
damages. FHLB San Francisco dismissed the federal claims with
prejudice on August 11, 2011. On September 8, 2011, the court
denied defendants’ motions to dismiss the state law claims.
Luther Litigation and Related Actions
On November 14, 2007, David H. Luther and various pension funds
(collectively, the Luther Plaintiffs) commenced a putative class
action against CFC, several of its affiliates, MLPF&S and certain
former officers of these in California Superior Court, Los Angeles
County, entitled Luther v. Countrywide Financial Corporation, et al.
(the Luther Action). The Luther Plaintiffs’ complaint asserts certain
MBS Claims in connection with MBS issued by subsidiaries of CFC
in 429 offerings between 2005 and 2007. The Luther Plaintiffs
certified that they collectively purchased securities in 63 of 429
offerings for approximately $216 million. The Luther Plaintiffs seek
compensatory and/or rescissory damages and other unspecified
relief. On January 6, 2010, the court granted CFC’s motion to
dismiss with prejudice due to lack of subject matter jurisdiction.
On May 18, 2011, the California Court of Appeal reversed the
dismissal and remanded to the Superior Court. Defendants have
filed a motion to dismiss.
Following the previous dismissal of the Luther Action on January
6, 2010, the Maine State Retirement System filed a putative class
action in the U.S. District Court for the Central District of California,
entitled Maine State Retirement System v. Countrywide Financial
Corporation, et al. (the Maine Action). The Maine Action names the
same defendants as the Luther Action, as well as the Corporation
and NB Holdings Corporation, and asserts substantially the same
allegations regarding 427 of the MBS offerings that were at issue
in the Luther Action. Plaintiffs in the Maine Action (Maine Plaintiffs)
seek compensatory and/or rescissory damages and other
unspecified relief.
On November 4, 2010, the court granted CFC’s motion to
dismiss the amended complaint in its entirety and held that the
Maine Plaintiffs only have standing to sue over the 81 offerings in
which they actually purchased MBS. The court also held that the
applicable statute of limitations could be tolled by the filing of the
Luther Action only with respect to the offerings in which the Luther
Plaintiffs actually purchased MBS. As a result of these standing
and tolling rulings, the number of offerings at issue in the Maine
Action was reduced from 427 to 14. On December 6, 2010, the
Maine Plaintiffs filed a second amended complaint that relates to
14 MBS offerings. On April 21, 2011, the court dismissed with
prejudice the successor liability claims against the Corporation
and NB Holdings Corporation. On May 6, 2011, the court held that
the Maine Plaintiffs only have standing to sue over the specific
MBS tranches that they purchased, and that the applicable statute
of limitations could be tolled by the filing of the Luther Action only