BankAmerica Corp. has agreed to pay $19 million to trust beneficiaries in a preliminary settlement approved Tuesday by a federal judge in San Francisco.
The settlement, approved by Judge Charles Legge of U.S. District Court for the Northern District of California, would end two related class actions filed in 1995. Beneficiaries should get notice of the approval this week, and a fairness hearing is scheduled on the settlement Feb. 19.
The plaintiffs in Fisher v. Bank of America and van Zwanenberg v. Bank of America alleged that investments totaling $14.6 million in three real estate limited partnerships on behalf of trust beneficiaries were imprudent.
The investments were made in 1984, 1986, and 1990 by the trust department of Security Pacific Corp., which BankAmerica bought in 1992.
The amount to be paid is to compensate for returns the trusts would have gained if the assets had remained in blue-chip stocks, bonds, and conservative real estate investments, said Robert W. Mills, an attorney for the plaintiffs.
BankAmerica has denied any wrongdoing and maintained that the partnership investments were "prudent and reasonable."
- Katharine Fraser