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July 23, 2012 11:43 pm
A lawyer for Baupost, a Boston-based hedge fund, said it wished to “withdraw as an intervener in this proceeding” in a letter to Barbara Kapnick, the judge at the New York Supreme Court, who is deciding the case.
The exit of Baupost, which fought the settlement under the name Walnut Place, leaves AIG, the insurance group, as the last significant opponent to the deal.
“It’s obviously a very welcome and important development from our perspective,” said Kathy Patrick, a partner at Gibbs & Bruns, who represented investors in agreeing the settlement. She said she hoped remaining holdouts would “take this opportunity to take a second look” at the “enormously valuable” deal on offer.
The settlement between BofA and Bank of New York Mellon, the trustee for a group of mortgage bonds, has the support of other key investors including BlackRock and MetLife.
BofA has been weighed down by its past mortgage misdeeds over the past few years. Investors who bought mortgage-backed securities have been demanding compensation for those that contained soured loans that breached underwriting guidelines.
The issue flared up again during the bank’s second-quarter earnings presentation last week when BofA disclosed that claims had jumped from both private mortgage investors and Fannie Mae and Freddie Mac, the government-backed mortgage companies.
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