Thursday, October 13, 2011

Can Bank of America Bankrupt Countrywide to Avoid Insolvency?
- Not So Fast Says Legal Journalist Frankel

Alison Frankel must be the smartest journalist on the planet when it comes to legal matters. She writes a blog for Reuters called On the Case. Recently she commented on speculation in the financial press that Bank of America could dodge insolvency by separating what used to be Countrywide and bankrupting that unit only. Ms. Frankel considers that unlikely to work and points out that at least one New York Trial Court has already treated the Countrywide acquisition as a "defacto merger", which would prohibit BofA from separating the Countrywide mortgage business for a separate bankruptcy.

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