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.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights
- Locations: Red Bank, NJ, New York City, 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
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: George McGowan
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Author: George McGowan
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
Author: George McGowan
How to Effectively Use Contracts to Manage Risk
Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]
Author: George McGowan
Understanding Portability for Estate and Gift Tax
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Author: Marc J. Comer
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.