Shareholders have filed a civil lawsuit against Merrill Lynch Chief Executive John Thain and the company’s board of directors over the buyout by Bank of America Corp. The lawsuit, filed in a New York State court on behalf of a single shareholder and a class of investors, said the proposed $50 billion sale was “wrong, unfair and harmful to Merrill public stockholders.” The lawsuit described the woes of the subprime mortgage crisis and said Merrill’s attempt to mitigate its losses had failed. The suit contends that Merrill’s public stockholders “have been and will continue to be denied the fair process and arm’s length negotiated terms to which they are entitled in a sale of their company.” I doubt seriously that top folks at Merrill disclosed all they knew. The lawsuit will be typical of what lots of corporations may well be facing in the coming months.
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