Bank of America Corp. directors, who were sued by shareholders for allegedly paying too much for Merrill Lynch & Co., must defend a proposed $20 million settlement of the claims in federal court in New York.
U.S. District Judge P. Kevin Castel, in a so-called order to show cause filed April 13, said the directors and lead plaintiffs Louisiana Municipal Police Employees Retirement System and Hollywood Police Officers’ Retirement must appear before him to explain why they shouldn’t be stopped from consummating the proposed settlement.
The judge issued the order in response to a request from plaintiffs in a similar lawsuit in Delaware, according to the filing in federal court in Manhattan. The supporting documents filed by the Delaware plaintiffs weren’t available on the website of the federal court in Manhattan.
The New York Times reported earlier that the Delaware plaintiffs objected to the settlement in New York as inadequate.
Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America, didn’t immediately return phone and e-mail messages after regular business hours yesterday seeking comment on the judge’s order.
The New York case is In re Bank of America securities, derivative and employee retirement income securities act litigation, 09-02058, U.S. District Court, Southern District of New York (Manhattan.) The Delaware case is Nancy Rothbaum v. Kenneth D. Lewis, CA4307, Delaware Chancery Court (Wilmington).