Bank of America Corp.’s announcement Friday that it would pay $2.43 billion to settle shareholder litigation over its purchase of Merrill Lynch & Co. in 2009 was likely a tough pill to swallow for the bank, which had tenaciously fought this case. For three-and-a-half years, BofA and its outside lawyers insisted that its disclosures about the Merrill deal were adequate. But after it lost ruling after ruling, and it faced an October 22 trial date, the bank finally threw in the towel. (Our affiliate The National Law Journal has coverage of that settlement here.)
This massive settlement raises questions about BofA’s litigation strategy. In particular, was it wise for Bank of America to choose Wachtell, Lipton, Rosen & Katz to lead its defense when Wachtell advised the company on the underlying disclosure issues? The American Lawyer raised this issue three years ago soon after the shareholder suits were filed, questioning whether Wachtell’s desire to defend its advice might color the bank’s litigation tactics. (You can read that article here.)
