Investors objecting to Bank of America Corp's
According to a Friday court filing, 11 entities sharing the name Walnut Place want to move the case to the U.S. District Court in Manhattan from the state supreme court in that borough.
They said the case qualifies as a mass action because of its size and complexity, making federal court jurisdiction appropriate. The matter has been in state court since June 29.
The settlement was intended to resolve much of Bank of America's remaining legal liability tied to its disastrous 2008 purchase of mortgage lender Countrywide Financial Corp.
Bank of New York Mellon Corp
Investors unhappy with the payout or disclosures had until August 30 to intervene in the case, ahead of a November 17 court hearing. Friday's filing may upset that timetable.
Bank of New York Mellon will seek to move the case back to state court and believes Walnut Place's effort is unsupported by the law and will only serve to delay the resolution of the proceeding, bank spokesman Kevin Heine said.
Bank of America spokesman Lawrence Grayson called the Walnut Place filing tactical maneuvering.
David Grais and Owen Cyrulnik, lawyers for Walnut Place, did not respond to emailed requests for comment.
Worries about how much Bank of America will ultimately have to pay angry mortgage securities investors, including in a $10 billion lawsuit by the insurer American International Group Inc
On Thursday, however, the bank won a vote of confidence in the form of a $5 billion investment from Warren Buffett's Berkshire Hathaway Inc
Other investors challenging the $8.5 billion settlement include pension funds and insurers, and six Federal Home Loan Banks, which offer financing for mortgage and business loans.
New York Attorney General Eric Schneiderman on August 4 announced his own opposition, suggesting the payout is too low and that Bank of New York Mellon is conflicted and could receive financial benefits from the accord.
A Schneiderman spokeswoman on Friday declined to comment.
The federal case is assigned to U.S. District Judge William Pauley. He is also handling an investor lawsuit that accuses Bank of America of dollar rolling -- concealing risk by transferring mortgage debt to another entity and buying it back after issuing quarterly statements.
In afternoon trading, Bank of America shares were up 5 cents at $7.70, far below their 52-week high of $15.31 set on January 14.
The state case is In re: The Bank of New York Mellon, New York State Supreme Court, New York County, No. 651786/2011. The federal case is The Bank of New York Mellon et al v. Walnut Place LLC et al, U.S. District Court, Southern District of New York, No. 11-05988.
(Reporting by Jonathan Stempel and Alison Frankel; Editing by Derek Caney, Phil Berlowitz and John Wallace)