Court Affirms Precedent To Spare Countrywide Board

Law360, New York (October 8, 2008, 12:00 AM EDT) -- A federal judge Tuesday affirmed a Delaware law’s post-merger limits on derivative shareholder claims, dealing a blow to former Countrywide Financial Corp. shareholders, who accused the company's board of directors of insider trading related to lucrative 2006 and 2007 stock repurchases.

Judge Sue L. Robinson of the U.S. District Court for the District of Delaware tossed the consolidated action, holding that Delaware law prevents shareholders from pursuing a derivative claim post-merger. Bank of America’s July stock-for-stock acquisition of Countrywide eliminated the shareholders’ legal standing because it...
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