Alison Frankel: Why BofA ponied up $500 mln in biggest-yet MBS class deal

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Alison Frankel: Why BofA ponied up $500 mln in biggest-yet MBS class deal

Alison Frankel: Why BofA ponied up $500 mln in biggest-yet MBS class deal

Reuters-

There is no question that Bank of America and its subsidiary Countrywide were winning a war of attrition with class action plaintiffs who claimed Countrywide violated federal securities lawyers when it issued deficient mortgage-backed securities. But for the bank, there was apparently just enough uncertainty about how many investors might have securities claims – and how many years of expensive litigation it would take to obtain a final answer to that question – to justify a $500 million settlement, the largest yet for an MBS class action.

You have to give credit to plaintiffs’ lawyers from Cohen Milstein Seller & Toll and Robbins Geller Rudman & Dowd, who have stuck it out through years of incredibly complicated procedural history. The class action was first filed all the way back in 2007 in state court on behalf of all Countrywide MBS investors. After machinations so tedious that you’d fall asleep before I finished recounting them, Cohen Milstein wound up as lead counsel in one federal court class action against the bank and Robbins Geller and Kessler Topaz Meltzer & Check ended up in charge of two others.

[REUTERS ON THE CASE]

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