Chaotic BofA

By Felix Salmon
September 9, 2009
o fire its own general counsel at the very point at which the acquisition was at its messiest, but also to do so in the most abrupt and inexplicable manner. The lawyer in question, Timothy Mayopoulos, is now the general counsel of Fannie Mae: he seemed to get that job quite easily in the wake of his high-profile defenestration. It's all very odd, and even Andrew Cuomo, armed with subpoenas, seems to be incapable of getting to the bottom of what exactly happened and why.

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How dysfunctional was Bank of America around the time of the Merrill Lynch acquisition? Dysfunctional enough that it felt the need not only to fire its own general counsel at the very point at which the acquisition was at its messiest, but also to do so in the most abrupt and inexplicable manner. The lawyer in question, Timothy Mayopoulos, is now the general counsel of Fannie Mae: he seemed to get that job quite easily in the wake of his high-profile defenestration. It’s all very odd, and even Andrew Cuomo, armed with subpoenas, seems to be incapable of getting to the bottom of what exactly happened and why.

What’s clear is that the upper echelons of the largest bank in the country have been in a state of chaos for some time, and that Bank of America’s board, in particular, is doing absolutely nothing to rectify the situation. Where the board has failed, regulators have to step in: this can’t continue indefinitely.

Comments
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Follow the real puppeteers Felix: Ed Herlihy and the Wachtell boys must be protected. Cuomo manages to write a 7-page letter that never mentions BofA’s primary outside counsel during the Merrill deal.

William Cohan in his big story on the BofA/Merrill merger in The Atlantic, notes in one paragraph that Herlihy was a big factor in making it happen. Yet curiously he never bothers to discuss Herlihy or the role of Wachtell again.

Interesting…maybe an intrepid reporter could look deeper into this. Also recall that it was Wachtell (via a NYTimes story on the Merrill merger) that pressed for John Thain’s bonus package to get set in stone. Whose Thain? Yep, that guy that helped Wachtell earns hundreds of millions of dollars in fees for the NYSE deal (or should I say deals, Euronext, etc.). Curious why Wachtell would be so hot to worry about the head guy on the OTHER side of the negotiating table…except for the fact that Wachtell believed Thain would inherit the BofA blob and continue the happy marriage between dealmaker and deal lawyer.

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