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For Bank Of America, Countrywide Bankruptcy Is Still An Option

Friday, August 12, 2011 - 12:54 PM
From DealBook -
The real issue around Bank of America is not whether it survives, but whether it sacrifices Countrywide to save itself. More specifically, will Bank of America put Countrywide into bankruptcy? And will this stem the bleeding?

The Countrywide acquisition will go down in history as a deal from hell. It has already cost Bank of America tens of billions of dollars in litigation settlements, let alone losses resulting in a $20.6 billion charge to earnings in the second quarter. Bank of America has already announced that it expects another $5 billion charge for earnings, and American International Group said this week that it would sue Bank of America for $10 billion, mostly for loans issued by Countrywide. It appears that $5 billion is the floor.

These mounting losses have raised the question whether Bank of America might be overwhelmed by Countrywide’s liabilities. Bank of America could be the first candidate for the new insolvency regime put in place by the Dodd-Frank Act.

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WhataBummerWhataBummer413 posts since
Oct 15, 2010
Rep Points: 1,702
1. Friday, August 12, 2011 - 5:11 PM
Somehow I can't bring myself to feel any sympathy for b of a - I wonder why?
darkdreamer4udarkdreamer4u178 posts since
Jun 11, 2010
Rep Points: 638