Settlement in B of A Holders’ Suit OKd

A federal appeals court Tuesday approved the settlement of a shareholder lawsuit against BankAmerica, clearing the way for the distribution of $21.1 million to about 35,000 stockholders and former stockholders.

A three-judge panel from the U.S. 9th Circuit Court of Appeals, sitting in San Francisco, unanimously affirmed a settlement approved by a federal judge in Los Angeles in January, 1988. A former bank employee had filed an objection to the settlement, but the court rejected his arguments.

The settlement resolved a series of lawsuits brought by shareholders who had accused the parent of Bank of America of concealing its financial problems in 1985.

“People are likely to begin receiving their money later this year,” said Richard Greenfield, one of the attorneys who sued the San Francisco-based banking company.

The money will go to people who have filed claims showing that they purchased BankAmerica stock between March 8, 1984, and Aug. 1, 1986. Legal fees of about $3 million will be subtracted from the $21.1 million.

The settlement also provides that BankAmerica receive $39.25 million from its former insurer, Employers Insurance of Wausau, Wis. The insurer will also pay the bank an additional $8.2 million to cover a portion of the losses suffered by Bank of America in an unrelated mortgage-backed securities scheme in 1985.