2008-11-10 — thestreet.com
As of Friday, Countrywide and its subsidiary Countrywide Home Loans transferred "substantially all" of their assets and operations to BofA. The Charlotte, N.C., bank also assumed roughly $16.6 billion of debt securities and guarantees, the filing said.
Critics of the deal, announced in January, were concerned that BofA would not take on responsibility for Countywide's debt in light of the souring economy. The company had said this spring that it was mulling its options for Countrywide's debt, including "allowing it to remain outstanding as obligations of Countrywide (and not Bank of America)," according to a May SEC filing.
I think this was a victory for rule of law, given that it seems like it would have had to be fraudulent conveyance to "keep Countrywide's obligations outside of Bank of America". The downside for Bank of America, of course, is now they cannot eat their cake and have it too. Which is why the stock is down (and the market probably has yet to appreciate the full impact of Countrywide's liabilities).
Perhaps at this point BofA has decided that their Countrywide toxic waste will likely become the taxpayer's toxic waste. Or already has...
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