Delaware Court Allows Countrywide-Bank Of America Merger To Proceed

July 5, 2008 8:39 a.m. EST

Wilmington, DEL (AHN) - Stockholders have lost their chance to stop settlement claims between Bank of America and Countrywide Financial Corp. in a share-swap deal amounting to $2.5 billion.

Judge John Noble of Delaware Chancery has reportedly said he is reluctant to reject or derail the merger and plans to hold a hearing in October on the final approval of the settlement.

Affected by the buyout are state employees and teachers in Arkansas, Colorado, Mississippi and Louisiana. Civil servants are fighting for their pension funds managed by the financially-stricken Countrywide. Bank of America plans to buyout Countrywide.

Stuart Grant, a California lawyer rejecting the settlement, said shareholders should be given monetary relief.

Noble allowed the settlement to proceed. But he still gave Countrywide stockholders the chance to gather evidence on how the merger was negotiated, which they can present during final hearing.