Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bank of America Says Countrywide Bankruptcy Remains an Option
Author: Joel R. Glucksman
Date: June 25, 2013
Key Contacts
Back
Bank of America is playing hardball with its Countrywide Financial unit, and recently raised the possibility of putting Countrywide into bankruptcy only two years after reaching a landmark $8.5 billion settlement with mortgage investors.
Countrywide, which struggled to stay afloat following a swarm of mortgage-related litigation after the housing market collapse, was purchased by Bank of America in 2008. However, the mortgage company’s legal issues are far from over, and institutional investors are now challenging the $8.5 billion settlement, claiming that the amount is inadequate.
Currently, AIG and other investors are asking the court to reject the settlement, which they called a “pennies-on-the-dollar bargain” for the bank, Bloomberg reports. This is largely because many investors report their total losses to be upwards of $100 billion.
At a court hearing in New York, Bank of America’s chief risk officer Terrence Laughlin said that recent talks with mortgage investors were “very tense” and combative, with both sides taking “very strong positions,” according to Bloomberg.
“I thought they were being extremely aggressive and one-sided in what they thought future losses would be coming out of these trusts,” Laughlin told the news source. “The investors were putting forth a very negative scenario. They were trying to put forth a high loss number [to reach a higher settlement.]”
If resolution talks fail and the bank does not win court approval for the settlement, seeking bankruptcy law protection for Countrywide may be a viable option.
“One of the options that was available to us and continues to be available to us was to put Countrywide into bankruptcy,” Laughlin said at the hearing.
While a handful of investors continue to lobby for a higher settlement amount, there are several investors that are in support of the existing terms and conditions, including Pacific Investment Management Co., Goldman Sachs Asset Management, and MetLife Inc.
- Locations: Red Bank, NJ, New York City, Washington, D.C., Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
How Understanding Bankruptcy Trends Can Benefit Your Business
The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]
Author: Brian D. Spector
SEC Takes Actions Against Issuers for Failure to File Form D
In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]
Author: Kenneth C. Oh
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda
On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]
Author: Matthew F. Mimnaugh
What Are FIRPTA Withholding Requirements?
If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]
Author: Jesse M. Dimitro
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.