A judge has ruled that Bank of America (BAC) does not have to defend itself against a lawsuit filed by the Federal Deposit Insurance Corp. on behalf of a failed bank.

The lawsuit, tied to the FDIC's efforts to reclaim funds on behalf of Colonial Bank in Montgomery, Ala., failed to meet the statute of limitations, U.S. District Judge Mariana Pfaelzer said in a Monday ruling. Her decision means the FDIC is unable to pursue claims for hundreds of millions of dollars in damages that allegedly resulted from misleading statements by the former Countrywide about the quality of loans that backed securities that Colonial purchased in 2006 and 2007.

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