Bloomberg reports that U.S. District Judge Kevin Castel in New York Friday approved Bank of America’s offer to add $42.5m to a $20m settlement of shareholder lawsuits alleging the bank’s board allowed executives to overpay for Merrill Lynch in 2009. Castel indicated in a January 4th order he had questions about the 'fairness, reasonableness and adequacy' of the original accord, according to court filings.
'We supported the terms of the settlement and we are gratified that the matter has been resolved', Lawrence Grayson, a Bank of America spokesman, said in a telephone interview Friday.
Resolution of the claims against Bank of America’s board clears the way for Castel to focus on whether to bless a more than $2.4bn settlement of other investors’ securities-fraud claims over the Merrill Lynch deal.
The shareholders claimed former CEO Kenneth D. Lewis and other board members misled them about the losses Merrill Lynch incurred before the $18.5bn buyout and should have pulled the plug on the deal.
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