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Directors of banking monolith Bank of America Corp. agreed to repay the company $2.5 million to settle a derivative suit filed in Wilmington, Del., by shareholders who contend they wasted corporate assets by giving former board members $6 million in gifts after a 1998 merger. Charlotte, N.C.-based Bank of America, formerly known as NationsBank Corp., was formed by the merger of NationsBank with BankAmerica. The new company’s directors subsequently mailed gifts, including $300,000 in cash and new stock, to each of 20 former directors of the two companies. BankAmerica shareholders Frank Seinfeld and Victoria Shaev filed suit in 1999 in Chancery Court in Wilmington, claiming the gifts were extravagant and amounted to corporate waste. Their suit asked a judge to order the new directors to repay the company for the gifts. After negotiations with shareholders’ lawyers, the new directors who were named as defendants in the suit agreed to pay Bank of America $2.5 million. Seinfeld and Shaev agreed to drop their suit because they concluded the settlement was “in the best interests of the company and all of its stockholders,” according to court papers. The settlement, which still must be approved by a judge, includes a provision that the company will pay Seinfeld’s and Shaev’s lawyers $500,000 in fees and expenses for challenging the gifts. Seinfeld and Shaev are represented in the case by Norman M. Monhait of Wilmington’s Rosenthal Monhait Gross & Goddess and A. Arnold Gershon of New York. BankAmerica’s directors are represented by R. Franklin Balotti and J. Travis Laster of Wilmington’s Richards Layton & Finger, while the bank itself is represented by Joel Friedlander of Wilmington’s Bouchard Margules & Friedlander. The case is Frank David Seinfeld and Victoria Shaev v. Charles W. Coker, et. al., CA No. 16964.

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