(NEW YORK) -- A group of bond investors is fighting a proposed $8.5 billion settlement Bank of America struck last week with holders of mortgage-backed securities sold by Countrywide Financial Loans.
According to court documents, the group -- under the name Walnut Place -- is accusing Bank of New York Mellon, trustee on the mortgage securitizations for Bank of America, of having "serious conflicts of interest" that would compromise the fairness of the deal.
"Walnut Place has serious concerns about the secret, non-adversarial and conflicted way in which the proposed settlement was negotiated and about the fairness of terms of the proposed settlement," the court filing stated.
Walnut Place wants investors to be able to opt out of the proposed agreement, should they choose, the court documents said.
The group of 11 investors argues that "the $8.5 billion that Countrywide and BofA have agreed to pay is therefore only a small fraction of the potential liability that they would have faced in litigation on half of the trusts."
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