BofA Rebuffs AIG Mediation Bid on $8.5 Billion AccordDavid McLaughlin
Bank of America Corp. said it won’t renegotiate its $8.5 billion mortgage-bond settlement with investors after American International Group Inc., which opposes the deal, sought mediation.
Bank of America won’t participate in mediation proposed by AIG and other opponents and “will not otherwise engage in any renegotiation,” Elaine Golin, an attorney for the lender, said in a June 25 letter filed today in New York state court.
“The settlement agreement reflects the result of lengthy, hard and arms-length negotiation,” Golin wrote. “It does not permit any of the economic terms to be renegotiated.”
A hearing to approve the settlement began earlier this month before Justice Barbara Kapnick in Manhattan. The agreement has the backing of an investor group that includes BlackRock Inc. The hearing is scheduled to resume July 8.
Kapnick on June 14 requested parties consider mediation to resolve objections, according to a June 21 letter by Daniel Reilly, an attorney for New York-based AIG. In the letter, Reilly asked Bank of New York Mellon Corp., the trustee for investors, to participate in settlement talks.
“Settlement discussions and mediation in an effort to achieve an improved settlement through an appropriate process is in the best interests of” the mortgage securitization trusts at issue in the case, Reilly wrote.
A lawyer for BNY Mellon then contacted Bank of America’s attorneys, asking for their response to the mediation request.
“It is our view that Bank of New York has, yet again, deferred to Bank of America rather than work to further the interest of the investors to whom it owes fiduciary duties,” AIG spokesman Matthew Gallagher said in a statement.
BNY Mellon spokesman Kevin Heine didn’t immediately respond to an e-mail seeking comment. Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment.
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).