Bank of America Wins Dismissal of Allstate Lawsuit

On February 3, 2012, Judge Mariana Pfaelzer of the Central District of California dismissed Bank of America from litigation brought by Allstate Insurance Company and its affiliates arising out of Allstate’s purchases of RMBS issued by Countrywide Financial Corporation. Allstate argued that Bank of America could face liability arising out of its acquisition of Countrywide because that acquisition amounted to an actual or constructive fraudulent transfer. Alternatively, Allstate asserted that Bank of America was liable under successor and vicarious liability theories. Judge Pfaelzer determined that Allstate failed to plead that Bank of America’s acquisition lacked reasonably equivalent consideration or was made with fraudulent intent. Judge Pfaelzer also found that Bank of America had not agreed to assume Countrywide’s liabilities, and that the acquisition of Countrywide was not a de facto merger such that Bank of America could face successor liability. Order.