Bank of America Corp. said it won’t renegotiate its $8.5 billion mortgage-bond settlement with investors after American International Group Inc., which opposes the deal, sought mediation.
Bank of America won’t participate in mediation proposed by AIG and other opponents and “will not otherwise engage in any renegotiation,” Elaine Golin, an attorney for the lender, said in a June 25 letter filed today in New York state court.
“The settlement agreement reflects the result of lengthy, hard and arms-length negotiation,” Golin wrote. “It does not permit any of the economic terms to be renegotiated.”
A hearing to approve the settlement began earlier this month before Justice Barbara Kapnick in Manhattan. The agreement has the backing of a group that includes BlackRock Inc. The hearing is scheduled to resume July 8.
AIG and other opponents believe mediation is “appropriate,” Daniel Reilly, an attorney for the insurer, wrote to Bank of New York Mellon Corp., the trustee for investors, on June 21.
“Settlement discussions and mediation in an effort to achieve an improved settlement through an appropriate process is in the best interests of” the mortgage securitization trusts at issue in the case, Reilly wrote.
The case is In the matter of the application of the Bank of New York Mellon, 651786-2011, New York State Supreme Court, New York County (Manhattan).
Editors: Peter Blumberg, Mary Romano