Cases / Notable Cases

Merrill Lynch and Bank of America Opt-Out Litigation


Wolf Popper LLP Secures $45 million for the State of New Jersey, Division of Investment From Merrill Lynch & Co., Inc.

Wolf Popper LLP, as co-lead counsel, secured a $45 million recovery for the State of New Jersey, Division of Investment (“New Jersey”) in litigation against Merrill Lynch & Co., Inc. (“Merrill Lynch”).  The action, in Superior Court, Hudson County, New Jersey (State v. Merrill Lynch & Co., L-3855-09), arose out of New Jersey’s January 2008 $300 million investment in Merrill Lynch preferred shares, and New Jersey’s conversion of those preferred shares into common shares in July 2008. 

The action was vigorously litigated over almost four years against Skadden, Arps, Slate, Meager & Flom, counsel for Merrill Lynch. Merrill Lynch had removed the state court case to federal court, but the federal court, on New Jersey’s motion, remanded the case back to state court. Merrill Lynch appealed from that remand, and on May 18, 2011, the United States Court of Appeals for the Third Circuit unanimously upheld the order of the District Court remanding the case back to the State Court of New Jersey. 

By decision, dated April 23, 2010, the Superior Court of the State of New Jersey denied Merrill Lynch’s motion to dismiss New Jersey’s complaint in its entirety, allowing the state to proceed with all of its claims.

After completion of extensive merits and expert discovery, on August 29, 2012, the Court denied Merrill Lynch’s motion for summary judgment in all material respects.   

The action was resolved approximately one month before the scheduled trial and while New Jersey’s interlocutory appeal from the denial of a discovery order was pending. 

New Jersey Attorney General Jeffrey S. Chiesa stated, in announcing the settlement, that “this is a fair and equitable outcome, and we are pleased to be recovering a substantial amount of dollars on behalf of New Jersey taxpayers.”

New Jersey Division Of Investment Prevails Against Merrill Lynch’s Motion For Summary Judgment

Wolf Popper represents the State of New Jersey Division of Investment (“NJ DOI”) in New Jersey, Division of Investment v. Merrill Lynch & Co, Inc. and Bank of America Corp.  The action, pending in Superior Court, Hudson County, New Jersey, arising out of NJ DOI’s January 2008 $300 million investment in Merrill Lynch & Co., Inc. (“Merrill”) preferred shares, and NJ DOI’s conversion of those preferred shares into common shares in July 2008.  After completion of merits and expert discovery, the defendants moved for summary judgment.  On August 29, 2012, Judge Barry Sarkisian of the Superior Court of New Jersey, Law Division, Hudson County, denied defendant Merrill’s motion for summary judgment in all material respects.  Judge Sarkisian has scheduled trial to begin on June 3, 2013.

Federal Appeals Court Unanimously Affirms District Court Remand to New Jersey State Court

Wolf Popper represents the State of New Jersey Division of Investment (“NJ DOI”) on an individual $300 million claim against Merrill Lynch & Co., Inc. (“Merrill”) pending in Superior Court, Hudson County, New Jersey, in New Jersey, Division of Investment v. Merrill Lynch & Co, Inc. and Bank of America Corp.  The claims arise out of NJ DOI’s January 2008 investment in Merrill preferred shares, and NJ DOI’s conversion of those preferred shares into common shares in July 2008.  Although defendants had initially removed this State Court case to Federal Court, the Federal District Court remanded the case back to state court, and defendants appealed from that remand.  On May 18, 2011, the United States Court of Appeals for the 3rd Circuit unanimously upheld the order of the District Court remanding the case back to the State Court of New Jersey.

New Jersey Superior Court Denies Motion to Dismiss in Its Entirety; Case Proceeds on Behalf of New Jersey’s Division of Investment

By decision dated April 23, 2010, the Superior Court of the State of New Jersey denied the motion of Bank of America and Merrill Lynch & Co. to dismiss the complaint filed by New Jersey’s  Division of Investment in State v. Merrill Lynch & Co., L-3855-09, in its entirety, allowing the state to proceed with all of its claims. 

State of New Jersey, Department of Treasury, Division of Investment v. Merrill Lynch & Co., Inc. and Bank of America Corp.

Wolf Popper represents the State of New Jersey Division of Investment (“NJ DOI”) on an individual $300 million claim against Merrill Lynch & Co., Inc. (“Merrill”) pending in Superior Court, Hudson County, New Jersey. The claims arises out of NJ DOI’s January 2008 investment in Merrill preferred shares, and NJ DOI’s conversion of those preferred shares into common shares in July 2008.

The lawsuit asserts claims of breach of contract and negligent misrepresentation with respect to Merrill’s financial condition. According to the complaint, Merrill distributed inaccurate and incomplete financial reports, under-stated financial risks to which it was exposed and violated generally accepted accounting principles. Largely on the basis of this misleading information, the NJ DOI agreed in January 2008 to purchase $300 million worth of preferred, “convertible” stock.

In July 2008, Merrill sought to reset the terms of the stock deal. According to the complaint, Merrill informed NJ DOI that all other members of an investment group that had bought the original “preferred” stock -- and who had then agreed to the July 2008 common stock conversion -- would receive the same investment terms. In fact, the lawsuit charges, at least one investor received a preferential deal that included a more favorable exchange rate and continued retention of preferred stock with a dividend.

The complaint was filed July 28, 2009.


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