Comments on: BofA saga continues as John Thain calls Lewis a liar http://www.creditwritedowns.com/2009/04/bofa-saga-continues-as-john-thain-calls-lewis-a-liar.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: Edward Harrison http://www.creditwritedowns.com/2009/04/bofa-saga-continues-as-john-thain-calls-lewis-a-liar.html#comment-56283 Edward Harrison Mon, 27 Apr 2009 17:11:00 +0000 http://www.creditwritedowns.com/?p=8127#comment-56283 @rfreud, it does seem like litigation must be Ken Lewis' angle. However, it is fairly clear already he will have an uphill battle because Paulson was careful not to write anything down (although I believe a verbal agreement is binding under NY law). Moreover Lewis looks to be the one neglecting his fiduciary responsibilities by caving in to pressure. This is a fascinating case in the politics of bankruptcy. BAC seems to be holding its own on the stock market though. Last I saw it was mildy down. @rfreud, it does seem like litigation must be Ken Lewis’ angle. However, it is fairly clear already he will have an uphill battle because Paulson was careful not to write anything down (although I believe a verbal agreement is binding under NY law). Moreover Lewis looks to be the one neglecting his fiduciary responsibilities by caving in to pressure.

This is a fascinating case in the politics of bankruptcy. BAC seems to be holding its own on the stock market though. Last I saw it was mildy down.

]]> By: rfreud http://www.creditwritedowns.com/2009/04/bofa-saga-continues-as-john-thain-calls-lewis-a-liar.html#comment-56282 rfreud Mon, 27 Apr 2009 16:54:00 +0000 http://www.creditwritedowns.com/?p=8127#comment-56282 Putting two and two together . . . . As the results of the bank stress tests are coming to light, Bank of America looks like one of the cases where there will be pressure to raise additional capital. Along with Citigroup, it is one of the institutions at risk of nationalization or regulatory seizure. Coincidentally, reports are circulated that the CEO of Bank of America, Ken Lewis, in depositions with the New York State Attorney General's Office has raised the possibility that former US Treasury Secretary Paulson and Federal Reserve Chairman Bernanke secretly caused him to act against the best wishes of his firms shareholders in exchange for substantial government guaranties and financial support. Specious litigation is often the last defense of a insolvent debtor prior to being forced to seek protection under the bankruptcy code. A mere inference of tortuous interference or lender liability is generally enough to bring a creditor to a settlement. Confabulated allegations are easy to manufacture but exceeding difficult to disprove. It is not hard to imagine Paulson lapsing into the role of a bully under stress and Bernanke is naive when it comes to hardball politics. The spin on BAC's Q1 was how happy they are with the acquisitions of Merrill and CountyWide. Why not have it both ways? Putting two and two together . . . .

As the results of the bank stress tests are coming to light, Bank of America looks like one of the cases where there will be pressure to raise additional capital. Along with Citigroup, it is one of the institutions at risk of nationalization or regulatory seizure.

Coincidentally, reports are circulated that the CEO of Bank of America, Ken Lewis, in depositions with the New York State Attorney General’s Office has raised the possibility that former US Treasury Secretary Paulson and Federal Reserve Chairman Bernanke secretly caused him to act against the best wishes of his firms shareholders in exchange for substantial government guaranties and financial support.

Specious litigation is often the last defense of a insolvent debtor prior to being forced to seek protection under the bankruptcy code. A mere inference of tortuous interference or lender liability is generally enough to bring a creditor to a settlement. Confabulated allegations are easy to manufacture but exceeding difficult to disprove.

It is not hard to imagine Paulson lapsing into the role of a bully under stress and Bernanke is naive when it comes to hardball politics.

The spin on BAC’s Q1 was how happy they are with the acquisitions of Merrill and CountyWide.

Why not have it both ways?

]]>