(Updates with AIG lawyer’s comment in second paragraph.)
Nov. 3 (Bloomberg) -- American International Group Inc. and other investors should be able to penetrate the “shroud of secrecy” that exists over negotiations leading up to Bank of America Corp.’s $8.5 billion mortgage-bond settlement, a lawyer for the insurance company said.
The institutions that negotiated the settlement -- Bank of America, Bank of New York Mellon Corp. and a group of institutional investors -- want to keep their communications confidential, said Dan Reilly, a lawyer for AIG, at a court hearing today.
“We have many questions, and we need more information,” Reilly told U.S. District Judge William Pauley in Manhattan. Investors in the mortgage-bonds covered by the deal, he said, “should know whatever it is they’re trying to keep secret.”
Bank of America’s proposed $8.5 billion settlement would resolve a fight with investors in Countrywide Financial Corp. mortgage-bonds. Charlotte, North Carolina-based Bank of America acquired Countrywide in 2008. BNY Mellon, the trustee for the mortgage-bond trusts covered by the agreement, has sought court approval of the agreement.
The settlement has drawn criticism from some investors, including AIG. Others have filed objections seeking more information about the deal.
At today’s hearing, Pauley said the exchange of evidence could proceed as Bank of New York seeks to appeal Pauley’s decision that the settlement should be reviewed in federal court and not state court.
Kevin Heine, a Bank of New York spokesman, declined to comment on the remarks by AIG’s lawyer. Kathy Patrick, a lawyer for the institutional investor group, and Lawrence Grayson, a Bank of America spokesman, didn’t immediately respond to e-mails seeking comment on them.
The case is Bank of New York Mellon v. Walnut Place LLC, 11-cv-05988, U.S. District Court, Southern District of New York (Manhattan).
--Editor: Michael Hytha
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