BankAmerica Corp. on Thursday said it has agreed to pay $187.5 million to settle a suit alleging that it mishandled billions of dollars of California municipal bond proceeds.
"We're happy to put this matter behind us," BankAmerica said in a press release. "This settlement will make up for any prior inadvertent mistakes and allow us to avoid the costs of very expensive litigation."
The suit was filed in 1995 in U.S. District Court for the Northern District of California by Patrick Stull, a former BankAmerica employee; the State of California and nearly 300 local governments joined the suit in 1997.
The plaintiffs claimed BankAmerica overcharged them in its role as bond trustee from 1985 to 1995.
The settlement will be distributed among the plaintiffs according to a formula to be presented to San Francisco Superior Court Judge A. James Robertson 2d in December.
-Olaf de Senerpont Domis