Countrywide Loses Bid for Suit Settlement

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Countrywide Financial Corp. lost a bid to settle a shareholder lawsuit over its $2.5 billion takeover by Bank of America Corp. when a judge ruled the agreement would improperly wipe out some investor claims.

The proposed settlement, which gave shareholders more information about Charlotte, North Carolina-based Bank of America’s July purchase of Countrywide, would wrongfully relieve the mortgage lender of having to face fraud allegations, Delaware Chancery Court Judge John Noble said.

SRM Global Fund LP contends it held onto its Countrywide stock based on the Lewis statement, and lost $80 million, Noble wrote. To resolve the case, Noble suggested choices including allowing investors to opt-out of a settlement, filing of a separate claim on Lewis’s statement, or “abandoning” the case without a settlement.


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