A federal appeals ruling was issued in favor of American International Group in conclusing that the lawsuit against the Bank of America Corp over mortgage losses must be heard in state court and not at the federal level.
The US$10 billion lawsuit was being heard in the 2nd US Circuit Court of Appeals and it dismissed a lower court order that denied AIG's bid to have the case heard in New York state court, The lawsuit is currently on hold until the issue of venue has been resolved.
The case stems from AIG accusing Bank of America, together with Countrywide and Merrill Lynch units as providing fraudelent misrepresentations in relation to the US$28 billion of residential mortgage backed financial instruments in the 349 trusts which AIG had purchased that later on resulted in massive losses.
When sought for comment, Bank of America did not immediately respond while an AIG spokesperson had no comment on the matter.
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