Investors of Countrywide Financial who have billions of dollars worth of pension might lose their money in the $2.5 billion buyout by Bank of America, stating that the directors of Countrywide Financial had settled for a very low price, one that cannot offer any significant monetary compensation to its shareholders. Countrywide Financial was worth approximately $4 billion in stock.

In an attempt to stop the deal, Countrywide Financial investors sued the company along with Bank of America over the unfair and inadequate terms of the settlement. The court, however, ruled in favor of Countrywide Financial and Bank of America. The directors of Countrywide Financial stood by their decision, saying that the company was already in tatters, facing bankruptcy and collapse of the mortgage market, and had to buy its way out quick, to which Bank of America responded with a very good deal.

But where does this place the investors and shareholders of Countrywide Financial? Most of them fear that the settlement between Countrywide Financial and Bank of America will virtually erase their claims and leave them penniless in the future.

Alas, in the corporate world where mergers and buyouts occur in the blink of an eye, nothing is certain.

Check out the Forbes profile on Courtney Ross.

Courtney Ross is the founder of the Ross School.

Learn more about Courtney Ross on the History of Corporate site.

This entry was posted on Friday, January 30th, 2009 at 7:32 pm and is filed under Biz Ops, Commerce Marketing, Money Management. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.