Bank of America Profits are Affected by Legal Costs

Bank of America has reported profits have been hit by legal costs.

For the last three months to the end of September net income came in down at $340m. It used to be $6.2bn in the same period last year. The bank took a $1.6bn charge for litigation expenses.

The bank has already paid $2.4bn to settle a lawsuit that had been brought by shareholders who said they had been misled about the acquisition of Merrill Lynch by Bank of America.  The acquisition occurred during the financial crisis.

Shareholders argued that Bank of America made misleading statements concerning the financial health of the two banks. However, Bank of America claims it did nothing wrong.

Bank of America warned that it would be hit by a pre-tax loss of $1.9bn and an additional $800m in charges due to changes in the UK corporate tax rate.

The information was taken from the BBC News website. If you like to get more info, please, go to:

Poor Outlook for Big Law Firm Profits in 2012

In an InsideCounsel article written by Cathleen Flahardy entitled Study says Biglaw Profits Look “Grim” for 2012, Wells Fargo’s Legal Specialty Group surveyed 115 law firms to measure their performance in the first half of 2012.  According to Jeff Grossman, the group’s national managing director, the results were not good, and he expects them to get worse. “We think the second half of the year is going to be softer than the first half,” he reported.

According to the report, law firm revenue growth between January and June was lower than their costs. While revenues grew at about a pace of 3 percent, costs were up by 6.5 percent.

So Who Gets the Profits From “Unfinished Business” in a Major Law Firm Bankruptcy Case?

So who is entitled to the profits for “unfinished business” in the bankruptcy of a major law firm?  That is the $64,000 question that was recently answered by a New York judge in the bankruptcy case of the firm of Dewey & LeBoeuf LLP.

The issue at stake is when partners leaving a defunct law firm bring unresolved cases with them to their new law firm, which law firm is entitled to the profits – the old defunct firm or the new one?  The trustee for former New York firm Coudert Brothers LLP had sued 10 firms that hired former Coudert partners in an effort to recover those profits. While no dollar amount was specified, as the firms did not provide documents outlining how much money they made, a federal judge in Manhattan ruled on Thursday that that the proceeds from those cases did indeed belong to Coudert Brothers.

District Judge Colleen McMahon made her decision on the following basis:

“Because the Client Matters belonged to Coudert on the Dissolution Date, and because the Coudert Partnership calls for the application of the Partnership Law to determine the post-dissolution rights of the partners, the Former Coudert Partners have a duty to account for profits they earned completing the Client Matters at the Firms,”

Judge McMahon’s decision sets a major precedent (particularly in New York) as it reaffirms a 1984 California case known as Jewel v. Boxer that had been adopted in several other states.

For additional information, please see the Wall Street Journal Law Blog article written by Jennifer Smith entitled: Profits from Unfinished Business Belong to Dissolved Law Firm, NY Judge Says