Investments

Bank of New York Mellon: $8.5bn settlement an ‘easy decision’

As closing arguments finished yesterday in a two-year long legal battle involving mortgage-bond investors and Bank of America Corp. (BAC), the attorney for Bank of New York Mellon Corp (BK) offered a final view on a contentious settlement:

The $8.5 billion settlement reached with Bank of America Corp., gave mortgage-bond investors more than twice what they would have recovered through litigation and was an “easy decision,” an attorney for the trustee who negotiated the deal said.

Matthew Ingber of Mayer Brown LLP in New York, who represented the trustee,Bank of New York Mellon Corp., yesterday asked New York State Supreme Court Justice Barbara Kapnick in Manhattan to approve the settlement during closing arguments of a hearing on the agreement.

The closing arguments mark the latest chapter in a winding legal battle that arose after RMBS trustees agreed to settlement of damage claims involving legacy Countrywide securities, only to see the settlement challenged in court by a separate group of investors who felt the settlement amount wasn't enough.

The case is now awaiting judge's opinion, and given the history of the case — we'd expect whatever ruling is handed down to be appealed.

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