BofA Disclosed Enough About Potential Litigation, Says NY Court

In a recent decision in the Southern District of New York, the court rejected shareholders’ contention that Bank of America was required to put a dollar amount or range on the potential loss it could take from a lawsuit brought by AIG. In claims arising from BofA’s sale of mortgage-backed securities, AIG put the figure at $10 billion, but the bank in an annual report issued soon after said only that it faced “substantial potential legal liability,” adding that it could not estimate “a range of loss for all matters in which losses were probable or reasonably possible.” In what Eric M. Roth, partner in the litigation department at Wachtell, Lipton, Rosen & Katz, calls a  thoughtful decision and an important precedent, Judge John Koeltl of the Southern District of New York granted BofA’s motion to dismiss.