UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
RICHARD DELMAN, derivatively
on behalf of the Nominal Defendant,
CHARLES K. GIFFORD, D. PAUL JONES,
JR., FRANK P. BRAMBLE, SR., MONICA
C. LOZANO, THOMAS J. MAY, VIRGIS
W. COLBERT, CHARLES O. HOLLIDAY,
BRIAN T. MOYNIHAN, DONALD E.
POWELL, MUKESH D. AMBANI, SUSAN
S. BIES, CHARLES O. ROSSOTTI and
CHARLES H. NOSKI,
BANK OF AMERICA CORP., a Delaware
2. Thus, at the time the CWC acquisition closed in July 2008, BAC management and
its Board had a full understanding of the potential liabilities which might arise in the future.
Rather than coming clean, or resolving the CWC issues, BAC management and the Board
adopted a wrongful and obstinate policy: refusing to cooperate with government regulators
investigating the Company’s mortgage foreclosure practices; obtaining reimbursement on
government guaranteed mortgages which were likely violative of the False Claims Act; failing
to comply with an Arizona Consent Decree requiring that BAC fairly entertain mortgage
modifications; engaging in massive “Robo-Signing” of foreclosure documents; agreeing to
cease Robo-Signing, but then resuming Robo-Signing despite its questionable legality. (“Robo
Signing” is the bulk execution of foreclosure-related documents without actual review for
accuracy and adequacy).
4. The BAC Board knew that BAC was legally obligated to proceed with legacy
mortgage foreclosures in a prudent lawful manner. This did not occur. Rather, the Board wholly
failed to rein in management. On the contrary, it let management engage in blatantly unlawful
excesses as outlined above and as discussed in detail below. The BAC Board is composed of
banking, finance and business professionals who fully understand the issues facing BAC, and
who fully appreciate why its response need to be lawful and transparent. Nonetheless, the Board
ignored numerous c1ear-as-day reports of irregularity bordering on fraud, and allowed the
Company to get drawn in to additional illegality, materially raising BAC’s potential liability.
As a result, the BAC Board breached its fiduciary duty and should be held liable to BAC for the
harm it has caused.
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