Thompson Reuters, New York
May 20, 2013
In guerrilla warfare you don’t have to win every battle, or even most of them. You just have to win enough to demoralize your opponent, hoping that he (or she) will want to stop fighting and cede to your demands. That seems to be the strategy of the remaining objectors to Bank of America’s proposed $8.5 billion settlement with investors in Countrywide mortgage-backed securities. Earlier this month, the steering committee of objectors, led by AIG and several Federal Home Loan Banks, revealed that their preferred endgame for the BofA deal would be a return to the negotiating table, this time with them seated across from BofA. The various objecting AIG entities could also probably be persuaded to drop objections via a settlement of their separate securities cases. Either way, the objectors don’t necessarily have to win a ruling that BofA’s proposed settlement isn’t fair or that the Countrywide MBS trustee, Bank of New York Mellon, was unreasonable in agreeing to the deal on behalf of all certificate holders. Opponents just have to be a sufficient nuisance and distraction to wrest at least some additional money from the banks.
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