Bloomberg News

BNY Seeks to Reverse Venue Ruling on BofA Mortgage-Bond Deal

November 02, 2011

(Updates with excerpt from filing in third paragraph.)

Nov. 1 (Bloomberg) -- Bank of New York Mellon Corp. is seeking to overturn a court decision that keeps Bank of America Corp.’s proposed $8.5 billion mortgage-bond settlement before a federal judge for review.

A federal judge in October denied BNY Mellon’s request to send the case back to the New York state court where it was first filed. BNY Mellon filed a petition to appeal with the U.S. Court of Appeals in Manhattan, bank spokesman Kevin Heine said today. The filing, which asks the court to accept the appeal, couldn’t be immediately confirmed in court records.

“The district court’s decision is unquestionably important, consequential, and (at a minimum) fairly debatable,” the New York-based bank said in a copy of the filing provided by Heine.

BNY Mellon is the trustee for the mortgage-securitization trusts covered by the proposed $8.5 billion settlement, which resolves claims from investors in Countrywide Financial Corp. mortgage bonds. Bank of America, based in Charlotte, North Carolina, acquired Countrywide in 2008.

BNY Mellon filed the settlement in state court and had planned to seek approval of the deal this month before the case was removed to federal court.

In his decision keeping the case in federal court, U.S. District Judge William Pauley wrote that the settlement “implicates core federal interests in the integrity of nationally chartered banks and the vitality of the national securities markets.”

The case is Bank of New York Mellon v. Walnut Place LLC, 11-cv-5988, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Stephen Farr, Fred Strasser

To contact the reporters on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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