Countrywide Settlement Gets Preliminary Approval
A federal judge in Los Angeles has preliminarily approved a $55-million settlement between Bank of America (BofA) and former employees of Countrywide Financial Corp.
The suit, Vincent Alvidres v. Countrywide Financial Corp., charges that Countrywide breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by continuing to offer company stock in its retirement plan. The National Law Journal reported that U.S. District Judge John Walter of the U.S. District Court for the Central District of California approved the settlement on August 24 (see “BoA Settles with Countrywide Plan Participants for $55M”).
Final approval is scheduled for November 16.
“We are settling to avoid the cost and uncertainty of further litigation,” said Shirley Norton, a spokeswoman for Bank of America Corp., which bought Countrywide last year, in the news report. Under the terms of the deal, Countrywide did not admit to any wrongdoing.
According to The National Law Journal, the settlement covers class members who participated in Countrywide’s retirement plan from January 31, 2006, to July 1, 2008. It includes an incentive award to plaintiff Vincent Alvidres of at least $10,000, plus attorney fees totaling up to 27.5% of the settlement fund.
In court documents, plaintiffs’ attorneys estimated that if they had been successful at trial they might have obtained $257 million, but they noted that the case entailed several challenges, including identifying an alternative investment that would have done better and proving that the breach occurred as early as Januray 31, 2006.