Slick BOA Trick

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May 3, 2008 8:07 pm

Everyone is familiar with BOA's purchase of Countrywide. Well, BOA may pull a neat little trick on Countrywide's bondholders. Below is a snippet with a link to the article below:


"Investors have been asking Bank of America about plans to back Countrywide's
debt since January, when the issue was raised in a conference call to discuss the merger. The bank has demurred ever since. Bank of America spokesman Scott Silvestri said today that the filing just means we haven't made a decision.'' ...

Whalen expects Bank of America to absorb the best assets, including Countrywide Bank, while the debt remains with a new company created by the merger, Red Oak Merger Corp. Red Oak may then file for bankruptcy, shielding Bank of America from liability, Whalen said."


http://www.bloomberg.com/apps/news?pid=20601087&sid=aXNMMNWfaz8I&refer=worldwide
 
Neat trick, eh?
May 6, 2008 8:24 am

they won't do that. it would have great ramifications throughout the financials. Lewis is playing a high stakes game and bluffing.

May 6, 2008 9:16 am
ezmoney:

they won't do that. it would have great ramifications throughout the financials. Lewis is playing a high stakes game and bluffing.

 
You're undoubtedly right, but think about it...wouldn't THAT scenario open a fascinating can o' worms?  The simple fact that they're thinking that (let alone saying it) says some interesting things about corporate America.
May 6, 2008 6:30 pm

for lewis to even incinuate that tells us alot about lewis