Turn On The Lights, Watch The Roaches Scatter Part 74

Remember that Foreclosuregate settlement offer Bank of America took for $8.5 billion to get off the hook for far more in fraud?  The company's creditors are suing the pants off them over it, claiming conflict of interest.

A group of bond-holders on Tuesday challenged Bank of America's record $8.5 billion settlement for losses on mortgage-backed securities, clouding its efforts to move past the subprime mortgage mess.


The proposed settlement was marred by "serious conflicts of interest" and "would extinguish the legal rights of hundreds of other investors," Walnut Place, the group of disgruntled bond-holders, alleged in a court filing.

"Walnut Place has serious concerns about the secret, non-adversarial, and conflicted way in which the proposed settlement was negotiated and about the fairness of the terms of the proposed settlement," the group said.

The challenge threatens to scuttle a deal that Bank of America had worked out with 22 large investment groups in an effort to close the door on its disastrous 2008 acquisition of mortgage lender Countrywide Financial.

Translation:  We're not letting you pay pennies on the dollar for the money you owe us.  Pay up, boys or we'll see you in court.  You really didn't think Bank of America would get off this easy when it involved screwing over the hedge fund titans, did you?