Walnut Place drops objections to $8.5 billion BofA deal

(Reuters) – Walnut Place, an entity that had challenged a proposed $8.5 billion settlement between Bank of America Corp (BAC.N) and investors in failed mortgage-backed securities, has withdrawn its objections to the deal.

The development on Monday was a step forward for Bank of America as it tries to clear up liability for toxic securities issued by Countrywide Financial Corp, the mortgage lender it acquired at the height of the financial crisis in 2008.

The agreement was reached in June 2011 between Bank of New York Mellon, acting as trustee, and institutional investors including BlackRock Inc (BLK.N), Metlife Inc (MET.N) and Allianz SE’s (ALVG.DE) Pacific Investment Management Co.

Walnut Place, a proxy for Boston-based hedge fund Baupost Group, had invested more than $1 billion in the securities. It did not participate in settlement negotiations and later complained that the deal was inadequate.

Baupost Chairman Seth Klarman declined to comment on Monday on why Walnut Place had withdrawn its objections. Walnut Place’s attorney, Owen Cyrulnik of Grais & Ellsworth, also declined to comment.

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