B of A Settlement OKd but Legal Fee Decision Put Off

A federal judge Tuesday approved a $21.1-million settlement of four class-action lawsuits accusing BankAmerica of mismanagement and concealing its deteriorating financial condition in the early 1980s.

U.S. District Judge William D. Keller, however, withheld a decision on how much of the $21.1 million should go to the lawyers who brought the case against the state’s largest banking company and parent of Bank of America.

Keller also delayed ruling on a settlement in a second set of so-called derivative lawsuits that would result in a recovery of $39.25 million for BankAmerica from its former insurance company.

San Francisco-based BankAmerica agreed to settle both sets of lawsuits without admitting any wrongdoing or liability.

Keller’s approval of the class-action settlement means that money can be disbursed to 10,000 to 20,000 people who purchased BankAmerica stock between March 8, 1984, and Aug. 1, 1986.

Lawyers who brought the class-action suits in 1985 are seeking $5.1 million in fees out of the $21.1 million, which represents 24.9% of the settlement.

A Florida bank, which bought BankAmerica shares during the period covered by the lawsuit, objected to the size of the fees, and Keller held a lengthy hearing on the matter Tuesday.

The judge did not say when he would rule on the fee issue, but he scheduled a hearing for today on the settlement in the derivative lawsuits.