BofA Mortgage Pact Judge Appointed to N.Y. Appeals Court
Barbara R. Kapnick, the New York State Supreme Court justice who is weighing approval of Bank of America Corp.’s $8.5 billion mortgage-bond settlement, was appointed by Governor Andrew Cuomo to an appellate court.
Kapnick is reviewing the Charlotte, North Carolina-based bank’s settlement with mortgage-bond holders following a hearing that began in June and ended in November.
Kapnick also presided over a 2012 hearing of a challenge to state regulators’ approval of the restructuring of bond insurer MBIA Inc. (MBI) from lenders including Bank of America. She dismissed the case in March.
The $8.5 billion accord resolves claims over mortgages packaged into securities and settles allegations the loans backing the bonds didn’t meet their promised quality. While the settlement was backed by a group of more than two dozen investors including BlackRock Inc. (BLK) and Pacific Investment Management Co., dozens of other investors objected.
Kapnick was elected to the New York State Supreme Court in Manhattan in 2001 and was assigned to the division that handles complex commercial cases in 2008, according to a statement from Cuomo’s office.
A graduate of Barnard College and Boston University’s School of Law, Kapnick began her judicial career when she was elected to New York City’s civil court in 1992.
David Bookstaver, a spokesman for the New York State Unified Court System, said that while the effective date of Kapnick’s appointment is unclear, a provision in the state constitution allows her to render a decision in a case that’s been fully presented.
“New York law empowers an appellate justice to render a decision in causes or proceedings which were submitted to her for decision before she became a justice of the appellate division,” Kathy Patrick, an attorney representing BlackRock and other institutional investors who back the settlement, said in an e-mail. “We therefore expect Justice Kapnick to rule on this matter as she would have in the ordinary course.”
Lawrence Grayson, a spokesman for Bank of America, declined to comment in a telephone interview. Dan Reilly, an attorney representing American International Group Inc. (AIG), the lead objector to the settlement, didn’t immediately return a voice-mail message seeking comment.
Rich Azzopardi, a spokesman for Cuomo, didn’t immediately respond to a request for comment on the effective date of her appointment, which doesn’t require Senate confirmation.
The case is In the Matter of the Application of the Bank of New York Mellon, 651786-2011, New York State Supreme Court, New York County (Manhattan).
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