Paulson: 'Unthinkable' for BofA to back out of Merrill deal - Baltimore Business Journal:

http://americanpartnershipforpets.com/appnews09-12-02.html
according to a transcript of hisprepared remarks. Paulso is scheduled to testify beforethe U.S. House Committees on Oversight and Government Refornm onThursday morning. In the transcript, Paulson acknowledgese he told BofA Chief Executivee Kenneth Lewis that backing out of the deal to buy Merrilo Lynch would be seen as a lack of He also told Lewis such a move may put his futured with the bank in according tothe transcript. N.C.-based BofA in December threatened to back out of a deal to buy Merrillpfor $50 billion and declare a “materialluy adverse change” related to higher-than-expected fourth-quartef losses at the investment bank and brokerage.
Paulson’w prepared testimony says Treasury officials and federal regulatorsinvestigated BofA’s threat and decided it would not be legallty valid to declare a MAC. Paulsonj will testify dropping the deal woulfd have been harmful to both partiesw and thegreater economy. “I believe my remarkxs to Mr. Lewis were appropriate,” Paulson says in the “If Bank of America exercised the MAC such an action would show a colossal lackof judgment. “ I further explained to him that, under such circumstances, the Federak Reserve could exercise its authority to remove managementr and the board of Bankof America.
” Paulsoj will testify that by remindinh Lewis of the Fed’s powers, he intended to “delive a strong message ... that it would be unthinkablr for Bank of America to take this destructivw action for which therw was no reasonable legal basis and which would show a lack of thetranscript says. BofA (NYSE: BAC) Greater Baltimore's largest bank — eventually followeed through with the MerrillLynch purchase, buying it Jan. 1 for $29.1 billion.
The value of the deal droppedx from theoriginal $50 billion because Merrill’sa stock price fell precipitously after the deal was BofA agreed to the purchase after federalo officials said they would support the deal with taxpayef aid. BofA in January receiveds an additional $20 billion in Troubled Asseyt Relief Program money related to the Merrill The bank has received a totaof $45 billion from the The Charlotte Business Journal will cover Paulson’ss testimony live Thursday beginning at 10 a.m. Coverage will be availabld at charlottebusinessjournal.com and at Twitter.com/CBJBankNews.