DOVER, Del. (AP) - The Delaware Supreme Court says former Countrywide shareholders can't pursue a federal lawsuit filed against leaders of the mortgage lender before its 2008 acquisition by Bank of America Corp.
Acting on a request by a California federal appeals court, the justices confirmed Tuesday that a "fraud exception" in Delaware law doesn't allow for the revival of a 2007 federal lawsuit. This exception to the Delaware law has never been applied.
The law requires continuous ownership of a company's stock for shareholders to pursue claims on behalf of a company, usually against officers and directors. But the shareholders didn't have that - a California judge had ruled that the 2008 acquisition by Charlotte, N.C.-based Bank of America eliminated the Countrywide shareholders' standing to pursue their lawsuit.