Bloomberg News

Bank of America Seeks to Block CEO Deposition in MBIA Suit

February 17, 2012

(Updates with details of court filing starting in second paragraph.)

Feb. 16 (Bloomberg) -- Bank of America Corp. asked a New York state judge to block the deposition of Chief Executive Officer Brian T. Moynihan in a fraud lawsuit brought by MBIA Inc., a court filing showed.

The nation’s second-biggest lender, based in Charlotte, North Carolina, asked New York state Supreme Court Justice Eileen Bransten in Manhattan to issue a protective order against the deposition, according to a proposed order to show cause filed yesterday.

“We have moved for a protective order because a chief executive officer of a major corporation may only be deposed when he or she has unique information that is not available through other means.” Bank of America spokesman Lawrence Grayson, said today in a statement. “The discovery process remains fully available to MBIA, including through the numerous current and former executives that MBIA will be deposing.”

The proposed order to show cause asks Bransten to order MBIA to explain why a protective order against the deposition shouldn’t be issued. The motion for the protective order wasn’t immediately available in court records.

2008 Lawsuit

MBIA, which sued Countrywide in 2008, guarantees payments to investors that bought securities backed by pools of the lender’s loans. The insurer says the loans were riskier than Countrywide promised, and as they defaulted, the Armonk, New York-based company was forced to make payments.

Bank of America bought Calabasas, California-based Countrywide in July 2008 as the lender faced payment defaults and foreclosures tied to subprime mortgages. MBIA sued Countrywide three months later.

Grayson said the motion was filed under seal in accordance with the parties’ agreement regarding the production and exchange of information that includes internal company documents.

Bank of America believes MBIA has failed to meet its burden in attempting to depose Moynihan that the chief executive has unique and relevant information, Grayson said.

William Sushon, an attorney at O’Melveny & Myers LLP who filed the proposed order to show cause, didn’t immediately respond to messages seeking further comment. Manisha M. Sheth, an attorney with Quinn Emanuel Urquhart & Sullivan LLP who is representing MBIA, didn’t immediately return a telephone message left at her office.

The case is MBIA Insurance Corp. v. Countrywide Home Loans Inc., 602825-2008, New York State Supreme Court (Manhattan).

--Editors: Stephen Farr, Glenn Holdcraft

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

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; John Pickering at jpickering@bloomberg.net


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