Days before Bank of America shareholders approved the bank’s $50 billion purchase of Merrill Lynch in December 2008, top bank executives were advised that losses at the investment firm would most likely hammer the combined companies’ earnings in the years to come. But shareholders were not told about the looming losses, which would prompt a second taxpayer bailout of $20 billion, leaving them instead to rely on rosier projections from the bank that the deal would make money relatively soon after it was completed.
One bank executive attending that meeting was Timothy Mayopoulos, then Bank of America’s general counsel. In testimony noted in the court filing, Mr. Mayopoulos expressed surprise at the size of the loss, which he said he had not been told about. He testified that he tried to speak with Mr. Price about possibly disclosing the losses but that Mr. Price was not available.
The next day, the filing noted, Mr. Mayopoulos was “fired without explanation and immediately escorted from the premises, without being given the opportunity to collect his personal belongings.”