Settlement Proposed - 11/21/2008
On November 21, 2008, Bank of America and Merrill Lynch entered into a Memorandum of Understanding to settle shareholder litigation related to their merger agreement. The Memorandum of Understanding concerns lawsuits that were in the Delaware Court of Chancery and in the United States District Court of New York. The lawsuits, which name both Bank of America and Merrill Lynch as defendants, allege that Merrill Lynch’s board of directors breached their fiduciary duty in agreeing to Bank of America’s proposed buyout of Merrill Lynch. The lawsuits also allege that Bank of America aided and abetted the action. The lawsuits primarily aim to prevent the acquisition. As part of the settlement in the memorandum of understanding, Bank of America and Merrill Lynch agreed to make additional information available that was not disclosed in the original proxy statements filed with the SEC between October 2 and October 29, 2008. The additional disclosures will be made in a Form 8-K. Once the plaintiff’s counsel is able to confirm the disclosures are complete, according to the memorandum of understanding, the parties will enter into a stipulation of settlement.

Lawsuit Filed - 09/15/2008

<p>On Monday, September 15th, 2008, a shareholder of Merrill Lynch &amp; Co., Inc. (NYSE:MER) has filed proposed class action lawsuit in New York State Supreme Court in Manhattan against Merrill Lynch &amp; Co., Inc., Chief Executive John Thain and the company’s board of directors alleging that they breached their fiduciary duty over the proposed buyout of Bank of America Corp. as “wrong, unfair and harmful to Merrill public stockholders”.</p>
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<p style= text-align: justify; >The Bank of America Corp. Chief Executive Kenneth D. Lewis reportedly saw the Merrill purchase as a rare opportunity. Kenneth D. Lewis, chief executive of the Bank of America Corporation, said “This was almost a perfect fit, and we thought it was close enough to the bottom that we could make the deal work and be very good for our shareholders”. Merrill CEO John Thain reportedly called Bank of America CEO Ken Lewis last Saturday morning from a meeting between government and banking officials to discuss how to save the U.S. financial system from the breakdown of Lehman Brothers Holdings Inc and Bank of America CEO Lewis came up to New York immediately to archive a solution. According to the proposed deal, Bank of America will pay $29 per share for Merrill Lynch, which is 70 percent premium above Merrill’s Friday close at $17.05 per share, but almost only 50% of the close at $ 58.40 on February 1st, 2008. Under terms of the transaction, Bank of America would exchange 0.8595 shares of Bank of America common stock for each Merrill Lynch common share. Based on BofA’s closing price of $26.55 Monday, the deal was valued at less than $40 billion, or $22.82 a share. The plainfitt claims that Bank of America’s proposed acquisition, which values Merrill at $20 a share, “compares poorly” to Merrill Lynch’s 2007 value of more than $90 a share. He alleges that “The acquisition is designed to unlawfully divest Merrill public stockholders of their controlling interest in the company for grossly inadequate consideration” and that Merrill Lynch’s public stockholders “have been and will continue to be denied the fair process and arm’s length negotiated terms to which they are entitled in a sale of their company.” The plaintiff alleges the Chief Executive John Thain and the board “are in possession of nonpublic information concerning the financial condition of prospects of Merrill … which they have not disclosed to Merrill public stockholders” and they “have clear and material conflicts of interest and are acting to better their own interests at the expense of Merrill public shareholders.” The shareholder accuses in the complaint that CEO John Thain and other certain directors “spent a substantial effort tailoring the acquisition to meet their specific needs,” while they failed to negotiate a contract “reflecting the highest value reasonably available for the company’s shareholders”. If the deal goes through Bank of America gains Merrill Lynch’s 16,690 advisers managing about $1.6 trillion for retail customers.</p>
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<p style= text-align: justify; >Alois Pirker, senior analyst at Aite Group, a financial services advisory and research firm, reportedly said: “It’s a big gamble,”…”They could be the number one financial services firm in all areas. But if it doesn’t work out, it could go very badly.” And Schiff, president of Euro Pacific Capital reportedly said “This was a Hail Mary. They wanted to get so big that now, it will be easier for them to get financing, get the Fed to help them, or get a bailout because now they’re really too big to fail,” He added “That’s the name of the game — get yourself so big that the Treasury won’t allow you to go under.”</p>