BofA Directors to Pay $2.5 Million to Settle Suit

Directors of Bank of America Corp., the top U.S. bank, agreed to pay the company $2.5 million to settle a shareholders’ lawsuit claiming they wasted corporate assets by giving former board members $6 million in gifts after a 1998 merger. Charlotte, N.C.-based Bank of America, which changed its name from BankAmerica last year, was formed by the merger of the former NationsBank Corp. with Bank of America. The new company’s directors subsequently mailed gifts, including $180,000 in cash and $120,000 in new stock, to 20 former directors of the two companies. BankAmerica stockholders Frank Seinfeld and Victoria Shaev sued the following year in Delaware Chancery Court, claiming the gifts were extravagant. Their suit asked a judge to order the new directors to compensate the company for the expenditure. After negotiations among lawyers, new directors named as defendants agreed to pay Bank of America $2.5 million. Bank of America shares closed off 81 cents at $53.50 on the NYSE.