When Bank of America said yesterday that fourth-quarter results had tumbled by 95 percent, Kenneth D. Lewis, the bank's chief executive officer, remained confident about its plans to go forward with its plan to acquire the assets of Countrywide Financial, a mortgage lender at the center of the subprime meltdown.

"We did extensive due diligence," Mr. Lewis said, according to an article in The New York Times. "We looked at every aspect of the deal, from their assets to potential lawsuits and we think we have a price that is a good price."

When Bank of America announced the deal to buy Countrywide on January 11, the mortgage lender was facing a class action alleging securities fraud as well as several shareholder derivative lawsuits. A common theme was the allegations that insiders systematically sold off their stock in the company before revealing its problems last July.

The Securities and Exchange Commission said last October that it was investigating just such allegations, though it has not discussed the status of that investigation.

But the lawsuits don't stop with Countrywide: Bank of America itself faces at least three class actions challenging its deal to buy that troubled mortgage lender. Those complaints allege that Countrywide's officers sold the mortgage company for a song in order to escape liability in the pending derivative lawsuits.

Coughlin Stoia Geller Rudman & Robbins, William S. Lerach's former law firm, was first out of the box—in a classic rush to the courthouse—filing a class action in Los Angeles Superior Court on January 11, mere hours after the deal was announced.

The lawsuit notes that commentators called the exchange—under which investors would receive 0.1822 Bank of America share for each Countrywide share they own—a "bargain-basement price." It accuses Bank of America and Countrywide officers, including C.E.O. Angelo Mozilo, of "self-dealing."

The sale, they contend, was just "a ruse to purchase indemnity agreements and otherwise escape liability for the derivative and other pending litigation against them." Darren J. Robbins, the lead Coughlin lawyer on the complaint, declined to take a reporter's call about the lawsuit.

Meanwhile, two other firms filed similar class actions last week in Delaware Chancery Court.

Barrack, Rodos & Bacine of Philadelphia got to court on Jan. 14 with a complaint that contends the proposed deal is a "7.5 percent discount" to Countrywide's closing price on January 10, the day before the deal was announced. It alleges that Countrywide's board sold at a "unfair price" to insulate themselves, and that price does not take into account the $2 billion in claims in the pending lawsuits.

A day later, Cohen, Milstein, Hausfeld & Toll, a prominent class action firm in Washington, D.C., arrived with another class action challenging the deal. Neither law firm returned calls for comment.

Neither of the Delaware cases mentions "indemnity agreements," and in fact, Bank of America's filing with the Securities and Exchange Commission is fairly plain vanilla, according to Steven Davidoff, a Wayne State Law School professor who writes the Corporate M&A Law Prof Blog.

All three cases seek to enjoin the sale from going forward, and all of the cases were filed in the name of individual shareholders, rather than on behalf of a pension fund or some other institutional investor. They are usually in the drivers seat in these cases.

Indeed, there may be good reason for their lack of participation: As of last Friday, Countrywide's stock was down 7.3 percent, meaning that the Bank of America deal represents, at the deal price, a 27 percent premium on Countrywide's stock, according to the Wall Street Journal's deal blog.

That has left the plaintiffs' lawyers to contemplate the possibility of derivative case against the Bank of America officers for cutting such a terrible deal!

As for three recently filed cases, "the legal theory is perfectly viable—that directors were motivated by personal liability to sell on the cheap," says Lawrence Hamermesh, a corporate law professor at Widener University School of Law in Wilmington, Delaware.

The claims against the Countrywide officers will remain, he says, but it will be a new group of shareholders that holds them. Thus the maneuvering by the class action lawyers who already have cases going.

But corporate lawyers say Bank of America took the lawsuit risks into account as part of its due diligence.

"The risk in private litigation, that economic risk can be quantified and priced into the deal," says Andrew Sandler of Skadden, Arps, Slate, Meagher & Flom. "I don't worry too much about private litigation. Regulators can seek injunctive relief and that's the real risk."

Countrywide faces subpoenas from the attorneys general of California and Illinois, and an investigation by the United States Trustee Program, an arm of the Justice Department that oversees the federal bankruptcy system.

A Bank of America spokesman declined comment on the three lawsuits challenging the Countrywide deal.

by Karen Donovan