NEW YORK, Nov 3 (Reuters) - Investors want to lift the
"shroud of secrecy" over the proposed $8.5 billion settlement
of Bank of America Corp's mortgage-backed securities liability
in the coming weeks, a lawyer said on Wednesday.
Dan Reilly, a Colorado lawyer representing American
International Group Inc, told a New York federal judge that
some investors want negotiations and documents over the deal to
be made available to parties who have an interest.
"We want to come back to you and ask you to find it's not
confidential," Reilly told U.S. District Court Judge William
Pauley in Manhattan at a hearing for the judge to set a Nov. 17
date to start evidence gathering and schedule arguments.
Reilly said that Bank of New York Mellon Corp, the trustee
for hundreds of pools of mortgage-backed securities covered in
the agreement, had asked the judge to withold substantive
rulings until an appeal is heard.
"A shroud of secrecy is being pushed back by asking you not
to rule on anything," he said.
Bank of New York Mellon says that the months-long
negotiations that led to the proposed agreement were not secret
as some investors contend. They include Walnut Place, which
removed the case from state court to federal court, seeking to
have it supervised under federal class action law.
Representatives of Bank of New York Mellon, Bank of America
and Gibbs & Bruns for 22 institutional investors who are part
of the deal, all declined to comment on Thursday.
The settlement would resolve uncertainty for Bank of
America over potential liabilities tied to pools of soured
loans sold to investors by Countrywide Financial Corp, the
mortgage lender it bought in 2008.
Countrywide was the largest U.S. mortgage lender before
being taken over by BofA, a disastrous purchase analysts say
has effectively cost more than $30 billion after accounting for
lawsuits and writedowns.
A number of investors have objected to the proposed
settlement, which Bank of New York Mellon Corp presented to a
state judge in June for approval.
On Oct. 19, Pauley ruled the case belonged in federal
court. Bank of New York Mellon is seeking to appeal that
The cases are re: The Bank of New York Mellon, New York
State Supreme Court, New York County, No. 651786/2011; and The
Bank of New York Mellon et al v. Walnut Place LLC et al, U.S.
District Court, Southern District of New York, No.
(Reporting by Karen Freifeld; Additional reporting by Grant
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