Bank of America 2011 Annual Report Download - page 227

Bank of America 2011 225
with respect to the specific tranches of MBS that the Luther
Plaintiffs purchased. As a result of these tranche-specific standing
and tolling rulings, the Maine Action was further reduced from 14
offerings to eight tranches. On June 6, 2011, the Maine Plaintiffs
filed a third amended complaint that related to eight MBS tranches.
On June 15, 2011, the court denied the Maine Plaintiffs’ motion
to permit immediate interlocutory appeal of the court’s orders on
standing, tolling of the statute of limitations and successor liability.
On October 12, 2011, upon stipulation by the parties, the court
certified a class consisting of eight subclasses, one for each of
the eight MBS tranches at issue.
On November 17, 2010, Western Conference of Teamsters
Pension Trust Fund (Western Teamsters) filed a putative class
action against the same defendants named in the Maine Action
in California Superior Court, Los Angeles County, entitled Western
Conference of Teamsters Pension Trust Fund v. Countrywide
Financial Corporation, et al. Western Teamsters’ complaint asserts
that Western Teamsters and other unspecified investors
purchased MBS issued in the 428 offerings that were also at issue
in the Luther Action and asserts substantially the same allegations
as the Luther Action. The Western Teamsters action has been
coordinated with the Luther Action. Western Teamsters seek
unspecified compensatory and/or rescissory damages and other
unspecified relief.
On January 27, 2011, Putnam Bank filed a putative class action
lawsuit against CFC, the Corporation and several related entities,
among others, in the U.S. District Court for the District of
Connecticut, entitled Putnam Bank v. Countrywide Financial
Corporation, et al. Putnam Bank’s complaint asserts certain MBS
Claims in connection with alleged purchases in eight MBS offerings
issued by CFC subsidiaries between 2005 and 2007. Putnam Bank
seeks rescission of its purchases or a rescissory measure of
unspecified damages and/or compensatory damages and other
unspecified relief. On August 15, 2011, the case was transferred
to the Countrywide RMBS MDL.
Sealink Litigation
On September 29, 2011, Sealink Funding Limited filed a complaint
against the Corporation and related entities, Countrywide entities,
NB Holdings Corporation and certain former officers of
Countrywide. The action is entitled Sealink Funding Limited v.
Countrywide Financial Corp., and was filed in New York Supreme
Court, New York County. The complaint asserts certain MBS Claims
in connection with alleged purchases in 31 MBS offerings issued
and/or underwritten by Countrywide entities between 2005 and
2007. Sealink seeks among other relief, rescission of the
consideration Sealink allegedly paid for the securities, or
alternatively, damages allegedly incurred by Sealink, as well as
punitive damages. On October 6, 2011, defendants removed the
action to the U.S District Court for the Southern District of New
York. The JMDL transferred the case to the Countrywide RMBS
MDL.
Merrill Lynch MBS Litigation
Merrill Lynch, MLPF&S, MLMI, and certain current and former
directors of MLMI are named as defendants in a consolidated
class action in the U.S. District Court in the Southern District of
New York, entitled Public Employees’ Ret. System of Mississippi v.
Merrill Lynch & Co. Inc. Plaintiffs assert certain MBS Claims in
connection with their purchase of MBS. In March 2010, the court
dismissed claims related to 65 of 84 offerings with prejudice due
to lack of standing as no named plaintiff purchased securities in
those offerings. On November 8, 2010, the court dismissed claims
related to one additional offering on separate grounds. On
December 14, 2011, the court granted preliminary approval of a
settlement providing for a payment by the Corporation in an amount
not material to the Corporation’s results of operations (which
amount was fully accrued by the Corporation as of December 31,
2011).
Stichting Pensioenfonds ABP (Merrill Lynch) Litigation
On August 19, 2010, Stichting Pensioenfonds ABP (ABP) filed a
complaint against Merrill Lynch related entities, and certain current
and former directors of MLMI and other defendants, in New York
Supreme Court, New York County, entitled Stichting Pensioenfonds
v. Merrill Lynch & Co., Inc., et al. The action was removed to the
U.S. District Court for the Southern District of New York. ABP’s
complaint asserts certain MBS Claims in connection with alleged
purchases in 13 offerings of Merrill Lynch-related MBS issued
between 2006 and 2007. On October 12, 2011, ABP filed an
amended complaint regarding the same offerings and adding
additional federal securities law and state law claims. ABP seeks
unspecified compensatory damages, interest and legal fees, or
alternatively, rescission.
Regulatory Investigations
The Corporation has received a number of subpoenas and other
requests for information from regulators and governmental
authorities regarding MBS and other mortgage-related matters,
including inquiries and investigations related to a number of
transactions involving the Corporation’s underwriting and issuance
of MBS and its participation in certain CDO offerings. These
inquiries and investigations include, among others, an
investigation by the SEC related to Merrill Lynch’s risk control,
valuation, structuring, marketing and purchase of CDOs. The
Corporation has provided documents and testimony and continues
to cooperate fully with these inquiries and investigations.
Countrywide may also be subject to contractual indemnification
for the benefit of certain individuals involved in the MBS matters
discussed above.
Mortgage Repurchase Litigation
Walnut Place Litigation
On February 23, 2011, 11 entities with the common name Walnut
Place (including Walnut Place LLC, and Walnut Place II LLC through
Walnut Place XI LLC) filed a lawsuit, entitled Walnut Place LLC, et
al. v. Countrywide Home Loans, Inc. et al., in New York Supreme
Court, New York County, against CHL and several unaffiliated
defendants (collectively, Sellers), as well as the Corporation and
the Bank of New York Mellon in its capacity as trustee. The initial
complaint was a purported derivative action for alleged breaches
of a pooling and servicing agreement under which the Sellers sold
residential mortgage loans to a securitization trust. Plaintiffs are
alleged holders of certificates in several classes of the
securitization trust who purport to sue derivatively in the place of
the trustee. Plaintiffs allege that Sellers breached representations
and warranties in the pooling and servicing agreement regarding
mortgage loans. Plaintiffs seek a court order requiring Sellers to
repurchase the mortgage loans at issue, or alternatively, damages
for breach of contract, and allege that the Corporation is a
successor in liability to CHL. On April 12, 2011, plaintiffs amended